State of North Dakota Single Audit Report for the two-year period ended June 30, 2020
Summary
The North Dakota Office of the State Auditor, under State Auditor Joshua C. Gallion, issued this single audit of the State of North Dakota covering the fiscal years ended June 30, 2020 and 2019, with a transmittal letter dated March 17, 2021 addressed to Governor Doug Burgum and the Legislative Assembly. The report includes the auditor's reports on internal control and compliance, the schedule of findings and questioned costs, the schedules of expenditures of federal awards, management's response and corrective action, and a summary schedule of prior audit findings. The schedules report total expenditures of federal awards of $2,293,030,654 for fiscal year 2020 and $2,125,635,580 for fiscal year 2019. Major programs identified include the Coronavirus Relief Fund (21.019), the Education Stabilization Fund (84.425) and the Medicaid Cluster.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
This is the first part of the text (pages 1 to 558 of 727). The full document is in our copy of the file, ND-StateAuditor_2020-2019_Statewide_Single_Audit.pdf, listed under File and source.
NORTH DAKOTA
OFFICE OF THE
STATE AUDITOR
State Auditor Joshua C. Gallion
State of North Dakota
Single Audit Report
For the two-year period ended June 30, 2020
~~ I Office of the
1 | NORTH DAKOTA STATE AUDITOR’S OFFICE DEPARTMENT OF , ~ AND State
CORRECTIONS Auditor
REHABILITATION
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (JUNE 30, 2020) ………. A - 1
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS (JUNE 30, 2019) …………………………………………………………………. B - 1
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE
A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH UNIFORM GUIDANCE …………………………………………………. C - 1
INDEX OF SCHEDULE OF FINDINGS AND QUESTIONED COSTS ………………………………………………………… D - 1
SECTION I. SUMMARY OF AUDITOR'S RESULTS ..................................................................................... D - 4
SECTION II. FINANCIAL STATEMENT FINDINGS ……………………………………………………………………………….. D - 6
SECTION III. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS ……………………………………….. D - 9
AUDITEE'S SECTION
2020 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ................................................................... E - 1
2019 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS .................................................................. E- 42
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ................................................. E - 81
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION ....................................................................... F - 1
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS ................................................................................G - 1
APPENDIX
NORTH DAKOTA STATE AGENCIES (WITH ACRONYMS) ........................................................................ H - 1
The 2020 and 2019 Comprehensive Annual Financial Reports were issued separately.
7P
STATE AUDITOR PHONE
Joshua C. Gallion Office of the 701-328- 2241
State Audito r
FAX
70 l -328 -2345
STATE O F NORTH DAKOTA
www.nd .gov/aud itor
OFFICE OF THE STATE AUDITO R
ndsoo@ nd.gov
STATE CAPITOL
600 E. Boulevard Ave. Dept. 117
Bismarck. North Dakota, 58505
March 17, 2021
Honorable Doug Burgum Members of the Legislative Assembly
Governor, State of North Dakota of the State of North Dakota
Mr. Joe Morrissette, Director
Office of Management and Budget
We are pleased to submit the single audit of the State of North Dakota, covering the fiscal years
ended June 30, 2020 and 2019.
This report complies with the State’s audit requirements, including those placed upon the State
as a condition for the receipt of federal funds for fiscal years 2020 and 2019. The audit meets
the requirements of Chapter 54-10 of the North Dakota Century Code, the Single Audit Act
Amendments of 1996, and the provisions of the Office of Management and Budget (OMB)
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (contained in Title 2 of the U.S. Code of Federal Regulations Part 200).
We issued separate reports on the State of North Dakota’s financial statements for fiscal years
2020 and 2019. These reports are included in the State of North Dakota’s Comprehensive
Annual Financial Report issued under separate cover for each of the two fiscal years ended
June 30, 2020 and 2019 and are available upon request.
Respectfully submitted,
/S/
Joshua C. Gallion
State Auditor
Single Audit Report
Auditor’s Section
S E C T I O N
A U D I T O R ’ S
Office of the
State Auditor
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Report on Internal Control and Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed
In Accordance with Government Auditing Standards
The Honorable Doug Burgum, Governor of North Dakota
Members of the North Dakota Legislative Assembly
We have audited, in accordance with auditing standards general accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
governmental activities, the business-type activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the state of
North Dakota as of and for the year ended June 30, 2020, and the related notes to the financial
statements, which collectively comprise the state’s basic financial statements and have issued
our report thereon dated December 10, 2020.
Our report includes a reference to other auditors who audited the following entities, as described
in our report on the state of North Dakota’s financial statements:
Addiction Counselor Internship Job Service North Dakota
Loan Program Mandan Remediation Trust
Bank of North Dakota Medical Facility Infrastructure Loan Program
Beginning Farmer Revolving Loan Fund PACE and AG PACE Funds
Building Authority Public Employees Retirement System
College SAVE Public Finance Authority
Community Water Facility Loan Fund Rebuilders Loan Program
Comprehensive Health Association of Retirement and Investment Office
North Dakota School Construction Assistance Revolving
Covid Pace Recovery Program Loan Fund
Department of Trust Lands Small Employer Loan Fund
North Dakota Development Fund State Fair Association
Guaranteed Student Loan Program State Historical Society of North Dakota
Housing Finance Agency Foundation
Housing Incentive Fund Student Loan Trust
Infrastructure Revolving Loan Fund Workforce Safety and Insurance
Innovation Technology Fund
A-1
This report does not include the results of the other auditors’ testing of internal control over
financial reporting or compliance and other matters that are reported on separately by those
auditors. The financial statements of the North Dakota University System’s foundations, that are
reported as discretely presented component units, were not audited in accordance with
Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the state of North
Dakota’s internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness
of the state of North Dakota’s internal control. Accordingly, we do not express an opinion on the
effectiveness of the state of North Dakota’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. We did identify a certain deficiency in internal
control described in the accompanying Schedule of Findings, Recommendations, and Responses
as item 2020-01 that we consider to be a material weakness.
Responses to Findings
The Office of Management and Budget’s response to the finding identified in our audit is described
in the accompanying Schedule of Findings, Recommendations, and Responses. This response
was not subjected to the auditing procedures applied in the audit of the financial statements and,
accordingly, we express no opinion on the response.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the state of North Dakota’s financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
A-2
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the state of North Dakota’s internal control or on compliance. This report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the state of
North Dakota’s internal control and compliance. Accordingly, this communication is not suitable
for any other purpose.
/S/
Joshua C. Gallion
State Auditor
December 10, 2020
A-3
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Report on Internal Control and Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed
In Accordance with Government Auditing Standards
The Honorable Doug Burgum, Governor of North Dakota
Members of the North Dakota Legislative Assembly
We have audited, in accordance with auditing standards general accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
governmental activities, the business-type activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the state of
North Dakota as of and for the year ended June 30, 2019, and the related notes to the financial
statements, which collectively comprise the state’s basic financial statements and have issued
our report thereon dated December 11, 2019.
Our report includes a reference to other auditors who audited the following entities, as described
in our report on the state of North Dakota’s financial statements:
Addiction Counselor Internship Job Service North Dakota
Loan Program Mandan Remediation Trust
Bank of North Dakota Medical Facility Infrastructure Loan Program
Beginning Farmer Revolving Loan Fund PACE and AG PACE Funds
Building Authority Public Employees Retirement System
College SAVE Public Finance Authority
Community Water Facility Loan Fund Rebuilders Loan Program
Comprehensive Health Association of Retirement and Investment Office
North Dakota School Construction Assistance Revolving
Department of Trust Lands Loan Fund
Development Fund State Fair Association
Guaranteed Student Loan Program State Historical Society of North Dakota
Housing Finance Agency Foundation
Housing Incentive Fund Student Loan Trust
Infrastructure Revolving Loan Fund Workforce Safety and Insurance
This report does not include the results of the other auditors’ testing of internal control over
financial reporting or compliance and other matters that are reported on separately by those
B- 1
auditors. The financial statements of the North Dakota University System’s foundations, that are
reported as discretely presented component units, were not audited in accordance with
Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the state of North
Dakota’s internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness
of the state of North Dakota’s internal control. Accordingly, we do not express an opinion on the
effectiveness of the state of North Dakota’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. Given these limitations, during our audit we
did not identify any deficiencies in internal control that we consider to be material weaknesses.
We did identify a certain deficiency in internal control described in the accompanying Schedule of
Findings, Recommendations, and Responses as item 2019-01 that we consider to be a significant
deficiency. We noted another deficiency involving internal control that we have reported to the
management of the Office of Management and Budget in a letter dated December 11, 2019.
Responses to Findings
The Office of Management and Budget’s responses to the findings identified in our audit are
described in the accompanying Schedule of Findings, Recommendations, and Responses. These
responses were not subjected to the auditing procedures applied in the audit of the financial
statements and, accordingly, we express no opinion on the responses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the state of North Dakota’s financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
B-2
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the state of North Dakota’s internal control or on compliance. This report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the state of
North Dakota’s internal control and compliance. Accordingly, this communication is not suitable
for any other purpose.
/S/
Joshua C. Gallion
State Auditor
December 11, 2019
B- 3
7P
STATE AUDITOR PHONE
Joshuo C. Gallion Office of the 701-328-2241
State Auditor FAX
701-328-2345
STATE O F N O RTH DAKOTA
www.nd .gov/auditor
OFFICE OF THE STATE AUDITOR ndsao@nd.gov
STATE CAPITOL
600 E. Boulevard Ave. Dept. 117
Bismarck, North Dakota, 58505
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON
INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF
EXPENDITURES OF FEDERAL AWARDS REQUIRED BY UNIFORM GUIDANCE
Independent Auditor’s Report
The Honorable Doug Burgum, Governor Members of the Legislative Assembly
of the state of North Dakota of the state of North Dakota
Mr. Joe Morrissette, Director
Office of Management and Budget
Report on Compliance for Each Major Federal Program
We have audited the State of North Dakota’s compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material
effect on each of the State of North Dakota’s major Federal programs for the years ended
June 30, 2020 and 2019. The State of North Dakota’s major federal programs are identified in
the summary of auditor’s results section of the accompanying schedule of findings and questioned
costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the State of North Dakota’s
major federal programs based on our audit of the types of compliance requirements referred to
above. We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America; the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States; and
the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). Those standards and the Uniform Guidance require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major
federal program occurred. An audit includes examining, on a test basis, evidence about the State
of North Dakota’s compliance with those requirements and performing such other procedures as
we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our qualified and unmodified opinions
on compliance for each major federal program. However, our audit does not provide a legal
determination of the State of North Dakota’s compliance.
Basis for Qualified Opinion on the Child Care Development Fund (CCDF) Cluster
As described in the accompanying schedule of findings and questioned costs, the State of North
Dakota did not comply with certain compliance requirements that are applicable to the major
federal programs listed below. Compliance with such requirements is necessary, in our opinion,
for the State of North Dakota to comply with the requirements applicable to that program.
Program/Cluster Title Compliance Requirement Finding Number
CCDF Cluster (CFDA’s 93.575 and Special Tests and Provisions 2020-009
93.596) 2020-014
Qualified Opinion on the CCDF Cluster
In our opinion, except for the noncompliance described in the Basis for Qualified Opinion
paragraph, the State of North Dakota complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the
CCDF Cluster for the years ended June 30, 2020 and 2019.
Unmodified Opinion on Each of the Other Major Federal Programs
In our opinion, the State of North Dakota complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on each
of its other major federal programs identified in the summary of auditor’s results section of the
accompanying schedule of findings and questioned costs for the years ended June 30, 2020 and
2019.
Other Matters
The results of our auditing procedures disclosed other instances of noncompliance, which are
required to be reported in accordance with the Uniform Guidance and which are described in the
accompanying schedule of findings and questioned costs as items 2020-001, 2020-002,
2020-004, 2020-005, 2020-006, 2020-007, 2020-010, 2020-011, 2020-012, 2020-013, 2020-015,
2020-017, 2020-018, 2020-019, 2020-020, 2020-021, 2020-022, 2020-023, 2020-024, 2020-025,
2020-026, 2020-027, and 2020-028. Our opinion on each major federal program is not modified
with respect to these matters.
The State of North Dakota’s response to the noncompliance findings identified in our audit is
described in the accompanying management’s response and corrective action. The State of
North Dakota’s response was not subjected to the auditing procedures applied in the audit of
compliance and, accordingly, we express no opinion on the response.
Report on Internal Control Over Compliance
Management of the State of North Dakota is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above. In
planning and performing our audit of compliance, we considered the State of North Dakota’s
internal control over compliance with the type of requirements that could have a direct and
material effect on each major federal program to determine the auditing procedures that are
appropriate in the circumstances for the purpose of expressing an opinion on compliance for each
major federal program and to test and report on internal control over compliance in accordance
with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness
of the State of North Dakota’s internal control over compliance. Accordingly, we do not express
an opinion on the effectiveness of the State of North Dakota’s internal control over compliance.
C -2
Our consideration of internal control over compliance was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. However, as discussed
below, we did identify certain deficiencies in internal control over compliance that we consider to
be material weaknesses and significant deficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis. We consider the deficiencies in internal control over compliance described in the
accompanying schedule of findings and questioned costs as items 2020-009 and 2020-014 to be
material weaknesses.
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal
program that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance. We consider the
deficiencies in internal control over compliance described in the accompanying schedule of
findings and questioned costs as items 2020-001, 2020-002, 2020-003, 2020-004, 2020-008,
2020-010, 2020-011, 2020-012, 2020-013, 2020-016, 2020-017, 2020-018, 2020-019, 2020-020,
2020-021, 2020-024, 2020-025, and 2020-027 to be significant deficiencies.
The State of North Dakota’s responses to the internal control over compliance findings identified
in our audit are described in the accompanying management’s response and corrective action.
The State of North Dakota’s response was not subjected to the auditing procedures applied in the
audit of compliance and, accordingly, we express no opinion on the response.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other
purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type
activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information for the State of North Dakota as of and for the years ended
June 30, 2020 and 2019, and the related notes to the financial statements, which collectively
comprise the State of North Dakota’s basic financial statements. We issued our reports thereon
dated December 10, 2020 and December 11, 2019, respectively, which contained unmodified
opinions on those financial statements. Our audit was conducted for the purpose of forming
opinions on the financial statements as a whole. The accompanying schedule of expenditures of
federal awards is presented for purposes of additional analysis as required by the Uniform
Guidance and is not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. The information
C -3
has been subjected to the auditing procedures applied in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the schedule of
expenditure of federal awards is fairly stated in all material respects in relation to the basic
financial statements as a whole.
/S/
Joshua C. Gallion
State Auditor
Bismarck, North Dakota
March 17, 2021
C -4
State of North Dakota
Schedule of Findings and Questioned Costs - Index
Fiscal Years Ended June 30, 2020 and 2019
SECTION I
Summary of Auditors’ Results, Page D-4
Identification of Major Programs, Page D-5
SECTION II
Schedule of Financial Statement Findings, Page D-6
SECTION III
Schedule of Federal Findings and Questioned Costs for Federal Awards, Page D-9
Department of Commerce
CFDA NUMBER FEDERAL AGENCY FINDING NUMBER
14.228, 14.239, 81.042, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2020-001
93.569
DEPARTMENT OF ENERGY
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Department of Human Services
CFDA NUMBER FEDERAL AGENCY FINDING NUMBER
93.777, 93.778, 93.767 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-002
93.777, 93.778, 93.767 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-003
93.777, 93.778 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-004
93.777, 93.778 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-005
93.777, 93.778 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-006
93.777, 93.778 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-007
93.777, 93.778, 93.563 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-008
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-009
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-010
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-011
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-012
II!
D - 1 | SCHEDULE OF FINDINGS AND QUESTIONED COSTS - INDEX
State of North Dakota
Schedule of Findings and Questioned Costs - Index
Fiscal Years Ended June 30, 2020 and 2019
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-013
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-014
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-015
93.575, 93.596 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-016
93.558 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-017
93.658 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 2020-018
84.126 U.S. DEPARTMENT OF EDUCATION 2020-019
Department of Public Instruction
CFDA NUMBER FEDERAL AGENCY FINDING NUMBER
84.027, 84.173 U.S. DEPARTMENT OF EDUCATION 2020-020
10.565, 10.568, 10.553, U.S. DEPARTMENT OF AGRICULTURE (USDA) 2020-021
10.555, 10.558, 10.559,
10.560, 10.582
84.010, 84.287, 84.027, DEPARTMENT OF EDUCATION 2020-022
84.173, 10.553, 10.555,
10.556, 10.559, 10.558, DEPARTMENT OF AGRICULTURE (USDA)
84.367
10.553, 10.555, 10.559 U.S. DEPARTMENT OF AGRICULTURE (USDA) 2020-023
Department of Transportation
CFDA NUMBER FEDERAL AGENCY FINDING NUMBER
20.513, 20.505, 20.526, U.S. DEPARTMENT OF TRANSPORTATION 2020-024
20.600, 20.616, 20.205,
20.509
20.509 U.S. DEPARTMENT OF TRANSPORTATION 2020-025
20.509 U.S. DEPARTMENT OF TRANSPORTATION 2020-026
II!
D - 2 | SCHEDULE OF FINDINGS AND QUESTIONED COSTS - INDEX
State of North Dakota
Schedule of Findings and Questioned Costs - Index
Fiscal Years Ended June 30, 2020 and 2019
State Treasurer’s Office
CFDA NUMBER FEDERAL AGENCY FINDING NUMBER
15.433, 15.437 U.S. DEPARTMENT OF THE INTERIOR 2020-027
University System
CFDA NUMBER FEDERAL AGENCY FINDING NUMBER
84.425 U.S. DEPARTMENT OF EDUCATION 2020-028
II!
D - 3 | SCHEDULE OF FINDINGS AND QUESTIONED COSTS - INDEX
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2020 and 2019
Section I
Summary of Auditors' Results
Dollar threshold used to distinguish between Type A and Type B programs: $13,255,999
Auditee qualified as a low risk auditee? No
FINANCIAL STATEMENTS 2020 2019
Type of auditors’ report issued Unmodified Unmodified
Internal control over financial reporting:
Material weakness(es) identified? Yes No
Significant deficiency(ies) identified that are No Yes
not considered to be material weakness(es)?
Noncompliance material to financial No No
statements noted?
FEDERAL AWARDS 2020 2019
Internal control over major programs:
Material weakness(es) identified? Yes Yes
Significant deficiency(ies) identified that are Yes Yes
not considered to be material weakness(es)?
Type of auditors’ report issued on compliance for
major programs:
CCDF Cluster Qualified Qualified
All other major programs Unqualified Unqualified
Any audit findings disclosed that are required to be Yes Yes
reported in accordance with 2 CFR 200.516(a)?
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D - 4 | SUMMARY OF AUDITOR’S RESULTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2020 and 2019
Identification of Major Programs
CFDA Number(s) Name of Federal Program or Cluster
12.401 National Guard Military Operations and Maintenance (O&M) Projects
14.228 Community Development Block Grants
15.433 Flood Control Act Lands
15.437 Minerals Leasing Act
15.518 Garrison Diversion Unit
15.605, 15.611, 15.626 Fish and Wildlife Cluster
20.205, 20.219 Highway Planning and Construction Cluster
20.509 Formula Grants for Rural Areas and Tribal Transit Program
21.019 Coronavirus Relief Fund
84.010 Title I Grants to Local Educational Agencies
84.027, 84.173 Special Education Cluster (IDEA)
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States
84.287 Twenty-First Century Community Learning Centers
84.425 Education Stabilization Fund
93.044, 93.045, 93.053 Aging Cluster
93.558 TANF Cluster
93.563 Child Support Enforcement
93.569 Community Services Block Grant
93.575, 93.596 Child Care Development Fund Cluster
93.767 Children’s Health Insurance Program
93.777, 93.778 Medicaid Cluster
97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters)
97.067 Homeland Security Grant Program
Various Research and Development Cluster
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D - 5 | SUMMARY OF AUDITOR’S RESULTS
State of North Dakota
Schedule of Financial Statement Findings
Fiscal Years Ended June 30, 2019 and 2020
Office of Management and Budget
FINDING TYPE: Financial Statement
Finding F19-1
Finding Title: Lack of Required Note Disclosures
CRITERIA
According to the “Standards for Internal Control in the Federal Government”, management should identify,
analyze, and respond to significant changes that could impact the internal control system. Management should
also design control activities in response to the entity’s objectives and risks to achieve an effective internal control
system. (Green Book, GAO-14-704G para 9.01, 10.02)
GASB Statement 88, paragraph 5, states “a government should disclose in notes to financial statements
summarized information about assets pledged as collateral for debt.”
GASB Statement 62, paragraph 22, states that interest cost should be disclosed in the notes to the financial
statements. For an accounting period in which some interest cost is capitalized, the total amount of interest cost
incurred during the period and the amount thereof that has been capitalized should be disclosed.
CONDITION
The Office of Management and Budget does not have adequate procedures in place to ensure inclusion of
required disclosures from component auditor reports in the Comprehensive Annual Financial Reports (CAFR).
The Bank of North Dakota audit report contained a note disclosure identifying $1.47 billion of securities assigned
as collateral for debt which was not included in the CAFR note disclosures as required by Governmental
Accounting Standards Board (GASB) statement 88. In addition, the North Dakota University System audit report
disclosed $4 million of capitalized interest as required by GASB statement 62 which was not included in the
CAFR note disclosures.
CAUSE
The Office of Management and Budget has not designed adequate procedures to ensure the inclusion of required
items from component auditor reports.
EFFECT
There is potential for incomplete note disclosure and non-compliance with GASB requirements. The Office of
Management and Budget revised the note disclosures to include the identified errors of this finding.
RECOMMENDATION
We recommend the Office of Management and Budget improve procedures to ensure disclosure of GASB
reporting requirements from component audit reports are included in the CAFR.
OFFICE OF MANAGEMENT AND BUDGET RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
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D - 6 | SCHEDULE OF FINANCIAL STATEMENT FINDINGS
State of North Dakota
Schedule of Financial Statement Findings
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Financial Statement
Finding F20-1
Finding Title: Untimely Capitalization and Depreciation of Transportation Projects
CRITERIA
Construction of assets that are substantially complete and available for use on June 30 are not construction in
progress. When assets are substantially complete and meet the state’s capitalized threshold, the construction in
progress status needs to be removed and an asset needs to be added to asset records. This cost to acquire,
construct or improve a capital asset is not recognized immediately as expense when occurred, but instead
capitalized and allocated over the asset’s estimated useful life in the form of depreciation expense. The purpose
of recognizing depreciation expense is to allocate a proportionate share of the cost of the capital asset to each
period that receives a benefit. No benefit is received until the capital asset is substantially ready to be placed
into service.
Standards for internal control require that transactions are promptly recorded to maintain their relevance and
value to management in controlling operation and making decisions. Also, management should design control
activities so that all transactions are completely and accurately recorded.
References:
Governmental Accounting Standards Board (GASB) Statement No. 34, “Basic Financial Statements for State and
Local Governments”. Reporting Capital Assets. Paragraphs 18, 19, 21. 1999.
Government Finance Officers Association (GFOA). “Governmental Accounting, Auditing, and Financial
Reporting (GAAFR) Blue Book.” Capital Assets. 2012.
North Dakota Office of Management and Budget, “GAAP Closing Procedure Manual.” General Fixed Assets
Closing Package. 2020
North Dakota Office of Management and Budget, “Fiscal and Administrative Policy.” Fixed Asset Policies,
appendix A. August 2019
U.S. Government Accountability Office (GAO), “Standards for Internal Control in the Federal Government.”
Design of Appropriate Control Activities. (GAO-14-704G para 10.03). September 2014.
CONDITION
The Department of Transportation did not capitalize and depreciate state oil impact projects that were
substantially complete and in use. These projects were still included in construction in progress at June 30, 2020.
Considering the Department’s fiscal review period for project closeout which determines accurate project costs,
the audit identified projects without financial activity since June 30, 2017 and 2018 for calculating capitalizable
costs and depreciation, respectively. Total costs for these projects was $332,139,681. These projects should have
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D - 7 | SCHEDULE OF FINANCIAL STATEMENT FINDINGS
State of North Dakota
Schedule of Financial Statement Findings
Fiscal Years Ended June 30, 2019 and 2020
been reclassified from non-depreciable to depreciable capital assets for reporting on the Government-wide
Statement of Net Position and accrued depreciation expense of $3,727,377 during the audit period.
CAUSE
The Department of Transportation does not capitalize projects until a final fiscal review is completed which may
take multiple years. The capitalization of a project may be delayed if there is a backlog of projects for a final
fiscal review. A reporting process has not been established for the preparation of the CAFR to identify projects
that are substantially complete, but not yet capitalized in the asset management records.
EFFECT
Potential for a material misstatement on the Statement of Net Position for Capital Assets, Depreciable (Net) and
Nondepreciable. Depreciation expense is not recorded timely to be accrued for each period that the state benefits
from use of the capital assets.
RECOMMENDATION
We recommend Office of Management and Budget ensure Department of Transportation infrastructure projects
are capitalized and depreciated timely after the project is substantially complete and available for use.
OFFICE OF MANAGEMENT AND BUDGET RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
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D - 8 | SCHEDULE OF FINANCIAL STATEMENT FINDINGS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Department of Commerce
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-001
Federal Program: Community Development Block Grants, Community Services Block Grant, HOME
Investment Partnerships Program, Weatherization Assistance for Low-Income
Persons
CFDA #: 14.228, 14.239, 81.042, 93.569
Federal Award Number(s) B-13-DC-38-0001, B-14-DC-38-0001, B-15-DC-38-0001, B-16-DC-38-0001, B-17-DC-
and Year(s): 38-0001, B-18-DC-38-0001, B-19-DC-38-0001 (2013, 2014, 2015, 2016, 2017, 2018,
2019)
2017G994002, 2018G994002ACF, 2019G994002ACF, 2020G994002, 2020G990915
(2017, 2018, 2019, 2020)
HOME 12: M12-SG380100, HOME 13: M13-SG380100, HOME 14: M14-SG380100,
HOME 15: M15-SG380100, HOME 16: M16-SG380100, HOME 17: M17-SG380100,
HOME 18: M18-SG380100, HOME 19: M19-SG380100, HOME 20: M20-SG380100
(2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020)
DOE 17-19: DE-EE0007940 (2017, 2018, 2019, 2020)
Federal Agency: U.S. Department of Housing and Urban Development
U.S. Department of Energy
U.S. Department of Health and Human Services
Compliance Requirement: Other
Questioned Cost: $0
CRITERIA
2 CFR 200.510(b)(1-6), states that the grantee is responsible for the accurate preparation of the Schedule of Federal
Awards.
According to "Standards for Internal Control in the Federal Government" quality information needs to be
communicated to enable personnel to perform key roles in achieving the entities objectives. (GAO-14.704G
paragraphs 14.02 and 14.03)
CONDITION
The Department of Commerce does not have proper controls in place to ensure accuracy of the data that is
included on the Schedule of Expenditures of Federal Awards (SEFA). The following was noted on the fiscal year
2019 SEFA:
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D - 9 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
• An independent review was not performed on the Schedule of Expenditures of Federal Awards.
• The total amount of expenditures was overstated by $11.2 million. Of that amount:
o The Community Development Block Grant program was overstated by $5.5 million.
o The Community Services Block Grant program was overstated by $3.2 million.
o The HOME Investment Partnerships Program was overstated by $3.1 million.
o The Weatherization Assistance for Low-Income Persons was overstated by $2.5 million
CAUSE
Due to employee turnover, inexperienced staff prepared the SEFA without supervisory review
EFFECT
Inaccurate information was initially reported in the Schedule of Expenditures of Federal Awards and detected
and corrected through the audit.
CONTEXT
Incorrect expenditures reported on the fiscal year 2019 SEFA totaled $11.2 million and affected 14 programs.
For fiscal year 2019, 100% (2 out of 2) of the Federal programs reviewed as major programs had incorrect
expenditure amounts reported on the SEFA. These 2 programs made up 53% ($8.2 million) of the overall total
corrected Federal expenditures ($14.7 million) listed on the Department of Commerce's SEFA for fiscal year 2019.
RECOMMENDATION
We recommend the Department of Commerce accurately prepare and perform an independent review of the
Schedule of Expenditures of Federal Awards.
DEPARTMENT OF COMMERCE RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
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D - 10 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Department of Human Services
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-002
Federal Program: Medicaid Cluster and Children's Health Insurance Program
CFDA #: 93.777, 93.778, 93.767
Federal Award Number(s) 1905ND5ADM, 1905ND5MAP, 1905ND5021 (2019)
and Year(s): 2005ND5ADM, 2005ND5MAP, 2005ND5021 (2020)
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Eligibility
Questioned Cost: $4,782
CRITERIA
42 CFR 431.10 states the State Medicaid Agency or its designee is required to determine client eligibility in
accordance with eligibility requirements defined in the approved State plan.
42 CFR 435.603 (a)(2) states that the agency must apply the financial methodologies set forth in this section in
determining the financial eligibility of all individuals for Medicaid.
42 CFR 457.965 states the State must include in each applicant's record facts to support the State's determination
of the applicant's eligibility for CHIP.
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
During our testing of eligibility, we noted that eligibility was not properly determined by the Department of
Human Services (DHS) in the Children's Health Insurance Program and Medicaid.
DHS did not properly determine eligibility in 4 of 60 Children's Health Insurance Program (CHIP) cases
reviewed. Each of the cases were missing either income verifications, a narrative to support determinations, or
both. The errors resulted in improper payments totaling $4,659. When projected against the entire population,
the likely questioned costs total $1,119,228.
DHS did not properly determine eligibility in 1 of the 60 Medicaid cases reviewed due to a lack of updated
income information on the individual. As a result, auditor was unable to determine if the individual should have
been eligible for Medicaid or not. The error resulted in an improper payment totaling $123. When projected
against the entire population, the likely questioned costs total $695,468.
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D - 11 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
The Department's Quality Control Unit did their own review and also identified eligibility determination errors
as noted below.
The eligibility testing required by Center for Medicare and Medicaid Services (CMS) performed by the
Department's Quality Control Unit for the calendar year 2019 for the Medicaid program identified 14 of the 200
active cases tested had eligibility determination errors, an error rate of 7%. While 35 out of the 200 negative cases
tested had eligibility determination errors, an error rate of 17.5%.
The eligibility testing required by Center for Medicare and Medicaid Services (CMS) performed by the
Department's Quality Control Unit for the calendar year 2019 for the Children's Health Insurance Program
(CHIP) identified 27 of the 200 active cases tested had eligibility determination errors, an error rate of 13.5%.
While 28 out of the 200 negative cases tested had eligibility determination errors, an error rate of 14%.
Due to the public health emergency (Covid-19) CMS has changed its requirements for the payment review
portion of active cases. It is no longer required to determine payment error amounts. As a result, we are unable
to identify improper Federal payment amounts for the eligibility errors of the Department's Quality Control Unit
testing.
CAUSE
The Department is not documenting how the amount of income was determined. Also, the Department is
relying on applicants to provide updated income when there are changes in employment status. These
employment changes are not communicated timely to the Department. The Department verifies income with
North Dakota Job Service periodically, but between income verifications the applicant is required to provide
updated information when income changes.
EFFECT
Unallowable payments were made to providers on behalf of individuals whose eligibility for the CHIP and
Medicaid was not proper.
CONTEXT
There were 126,060 CHIP and Medicaid cases that received over $2.6 billion in payments for fiscal years ended
June 30, 2019 and 2020.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-002 and 2018-006 were reported in the immediate prior year. Finding 2016-004 and 2016-016 were
made in previous years.
RECOMMENDATION
We recommend the Department of Human Services ensure eligibility determinations made for the Medicaid and
CHIP programs are proper.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
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D - 12 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency
Finding 2020-003
Federal Program: Medicaid Cluster and Children's Health Insurance Program
CFDA #: 93.777, 93.778, 93.767
Federal Award Number(s) 1905ND5ADM, 1905ND5MAP, 1905ND5021 (2019)
and Year(s): 2005ND5ADM, 2005ND5MAP, 2005ND5021 (2020)
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Reporting
Questioned Cost: $0
CRITERIA
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The Department of Human Services (DHS) is not completing a reconciliation between PeopleSoft, the state’s
accounting system, and the Quarterly Children’s Health Insurance Program Statement of Expenditures for Title
XXI report (CMS-21 Report). DHS also did not complete a reconciliation between PeopleSoft and the grant
expenditures reported on the Quarterly Statement of Expenditures for the Medical Assistance Program (CMS-64
Report).
For both of these reports, the two quarters tested for each report did not have reconciliations completed.
CAUSE
The reconciliations were not completed primarily due to turnover in staff.
EFFECT
There is risk of fiscal year-end financial reporting being inaccurate if reconciliations between the Federal report
and PeopleSoft are not completed as it could potentially misstate the reporting on the Schedule of Expenditures
of Federal Awards. The auditors' testing of CMS reports did not identify any significant errors in financial
reporting.
CONTEXT
CHIP expenditures were $46,531,367 during the audit period. After the auditor inquired about reconciliations,
DHS did complete reconciliations for both grant and admin expenditures. No errors were noted.
Medicaid grant expenditures were $1,451,818,930 during the audit period. Admin expenditures were reconciled
and are not included in this expenditure amount.
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D - 13 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
RECOMMENDATION
We recommend the Department of Human Services perform reconciliations between the Federal reports and
PeopleSoft on a consistent basis.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-004
Federal Program: Medicaid Cluster
CFDA #: 93.777, 93.778
Federal Award Number(s) 1905ND5ADM, 1905ND5MAP (2019)
and Year(s): 2005ND5ADM, 2005ND5MAP (2020)
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Questioned Cost: $8,460
CRITERIA
45 CFR 75.403 states that in order to be allowable under Federal awards, a cost must be necessary and reasonable
for the performance of the Federal award. Duplicate payments are neither necessary nor reasonable.
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
Sixty potential duplicate payments were tested from the Medicaid Management Information System (MMIS).
Testing identified 10 of these were duplicate payments from MMIS.
CAUSE
The Department does not have proper procedures in place to detect and prevent duplicate or improper payments
from being issued
EFFECT
The known unallowable costs charged to the program were $8,460 and when projected against the entire
population, the likely questioned costs were $74,776.
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D - 14 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONTEXT
632 sets of duplicates totaling $2.1 million were identified as potential duplicate payments.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-005 was reported in the immediate prior year. Finding 2016-008 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services strengthen procedures and controls to prevent duplicate
payments.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Other Noncompliance
Finding 2020-005
Federal Program: Medicaid Cluster
CFDA #: 93.777, 93.778
Federal Award Number(s) 1905ND5ADM, 1905ND5MAP (2019) 2005ND5ADM, 2005ND5MAP (2020)
and Year(s):
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Questioned Cost: $493
CRITERIA
42 CFR 431.960 (c) (1) states a medical review error is an error resulting in an overpayment or underpayment
that is determined from a review of the provider's medical record or other documentation supporting the
service(s) claimed, Code of Federal Regulations that are applicable to conditions of payment, the State's written
policies, and a comparison between the documentation and written policies and the information presented on
the claim resulting in Federal and/or State improper payments.
42 CFR 431.960 (c) (3) states medical review errors include, but are not limited to, the following: (i) lack of
documentation, (ii) insufficient documentation, and (iii) procedure coding errors.
CONDITION
Medicaid providers submitted claims for payments for which the provider did not retain the required
documentation to support the service billed in 6 of 382 claims tested. This resulted in improper payments of
$231. When projected against the entire population, the likely questioned costs totaled $4,999,047.
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D - 15 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
The Department of Human Service completed Medicaid adjustments that were not coded correctly in 2 of the
120 claim adjustments tested. This resulted in improper adjustments of $262. When projected against the
entire population, the likely questioned costs totaled $101,665.
CAUSE
Medicaid providers did not retain proper documentation to support Medicaid claims and claim adjustments. In
addition, the Department did not ensure providers were coding claims and adjustments properly.
EFFECT
Unallowable or inaccurate payments and adjustments were made to providers without proper documentation.
CONTEXT
There were 121,684 individuals that were Medicaid eligible during our audit period of July 1, 2018, through June
30, 2020.
RECOMMENDATION
We recommend Department of Human Services ensure providers retain the proper documentation and are
coding claims correctly for Medicaid claims and adjustments.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Other Noncompliance
Finding 2020-006
Federal Program: Medicaid Cluster
CFDA #: 93.777, 93.778
Federal Award Number(s) and Year(s): 1905ND5ADM, 1905ND5MAP (2019) 2005ND5ADM,
2005ND5MAP (2020)
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Special Tests and Provisions
Questioned Cost: Unknown
CRITERIA
42 CFR 456.5 The agency must establish and use written criteria for evaluating the appropriateness and quality
of Medicaid services. This section does not apply to services in hospitals and mental hospitals. For these facilities,
see the following sections: 456.122 and 456.132 of subpart C; and 456.232 of subpart D.
The North Dakota Program Integrity Unit Audit Oversight outlines the type and frequency of audits to be
performed.
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D - 16 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONDITION
The Department of Human Services Program Integrity Unit did not fully execute their audit oversight document
for the Medicaid Program. Per the audit oversight document the new rehabilitation provider audit and the
recipient analysis are to be completed semi-annually. The new rehabilitation provider audit was scheduled to
start in the first quarter of calendar year 2019, however, it was never completed and it was determined to
discontinue these audits. While the recipient analysis was completed during the second half of calendar year
2018 and all of calendar year 2019, it had not been completed yet for calendar year 2020. Additionally, the
ambulance audits are to be conducted on a weekly basis. While the ambulance audits were completed for most
of calendar years 2018 and 2019, there were no reviews completed for December 2018 and audits stopped after
February 2020.
CAUSE
The new rehabilitation provider audit was not completed due to the lack of time and resources as well as upper
management’s decision to focus on audits that have a bigger fiscal impact. The semi-annual recipient analysis
was not completed for 2020 as the compliance technician was new to the position and due to a lack of
communication did not realize they needed to complete the analysis. The ambulance reviews have not been
completed since February 2020 due to the changing of staff and procedures.
EFFECT
The audits completed as required by the Audit Oversight document are the primary process to identify improper
use of Medicaid funds. If the audits are not being completed timely, individuals could be misusing Medicaid
funds.
CONTEXT
The Recipient Analysis and New Rehabilitation Provider Audits are required, by the Audit Oversight document,
to be performed once every six months. Additionally, Ambulance Audits are required by the Audit Oversight
document to be performed weekly. The Department did not perform all of these required reviews timely during
the audit period.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-003 was reported in the immediate prior year. Findings 2016-003, 2014-002, 2012-003 were made in
previous years.
RECOMMENDATION
We recommend the Department of Human Services ensure the Program Integrity Unit fully executes their Audit
Oversight policy.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
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D - 17 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Other Noncompliance
Finding 2020-007
Federal Program: Medicaid Cluster
CFDA #: 93.777, 93.778
Federal Award Number(s) 2005ND5ADM, 2005ND5MAP (2020)
and Year(s):
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Special Tests and Provisions
Questioned Cost: Unknown
CRITERIA
NCCI Medicaid Technical Guidance Manual Section 7.1.2 states at a minimum, the following elements must be
included in the confidentiality agreements for any contracted party using the Medicaid NCCI files posted to the
Medicaid Integrity Institute:
• Disclosure shall be limited to only those responsible for the implementation of the quarterly state
Medicaid NCCI edit files. Disclosure shall not be made prior to the start of the new calendar quarter.
• After the start of the new calendar quarter, a Contracted Party may disclose only non-confidential
information contained in the Medicaid NCCI edit files that is also available to the general public found
on the Medicaid NCCI webpage.
• The Contracted Party agrees to use any non-public information from the quarterly state Medicaid NCCI
edit files only for any business purposes directly related to the implementation of the Medicaid NCCI
methodologies in the particular state.
• New, revised, or deleted Medicaid NCCI edits shall not be published or otherwise shared with
individuals, medical societies, or any other entities unless it is a Contracted Party prior to the posting of
the Medicaid NCCI edits on the Medicaid NCCI webpage.
• Implementation of New, revised, or deleted Medicaid NCCI edits shall not occur prior to the first day
of the calendar quarter.
• Only a state Medicaid agency has the discretion to release additional information for selected individual
edits or limited ranges of edits from the files posted on the Medicaid Integrity Institute.
• State Medicaid agencies must impose penalties, up to and including loss of contract, for violations of
any confidentiality agreement relating to use of the MII edit files.
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D - 18 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONDITION
The Department of Human Services does not have a confidentiality agreement in place with Cotiviti in regards
to the NCCI. Medicaid National Correct Coding Initiative (NCCI) methodologies must be applied to Medicaid
fee-for-service claims submitted with, and reimbursed on the basis of, Healthcare Common Procedure Coding
System codes and Current Procedural Terminology codes. The NCCI files are to be updated on a quarterly basis
as required by the Medicaid Integrity Institute. The Department of Human Services contracts with Cotiviti to
implement the correct quarterly files from Medicaid Integrity Institute. The NCCI Medicaid Technical Guidance
Manual requires a confidentiality agreement to be in place for any contracted party using the Medicaid NCCI
files.
CAUSE
The Department of Human Services was unaware of the requirement to have a confidentiality agreement
EFFECT
The lack of a confidentiality agreement with Cotiviti could result in Cotiviti using non-public information from
the quarterly state Medicaid NCCI edit files for non-business purposes without any penalties being imposed.
Additionally, the lack of a confidentiality agreement with Cotiviti could lead to Cotiviti not updating the
quarterly files timely.
CONTEXT
There were 121,684 individuals that were Medicaid eligible during our audit period of July 1, 2018, through June
30, 2020 that had claims being processed by the Department of Human Services through Cotiviti.
RECOMMENDATION
We recommend the Department of Human Services ensure a confidentiality agreement is in place with Cotiviti
in regards to National Correct Coding Initiative.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
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D - 19 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency
Finding 2020-008
Federal Program: Medicaid Cluster and Child Support Enforcement
CFDA #: 93.777, 93.778, 93.563
Federal Award Number(s) 1905ND5ADM, 1905ND5MAP, 1901NDCEST, 1901NDCSES (2019)
and Year(s): 2005ND5ADM, 2005ND5MAP, 2001NDCEST, 2001NDCSES (2020)
Federal Agency: U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Questioned Cost: $0
CRITERIA
Standards for Internal Control in the Federal Government (Green Book) requires management to monitor the
effectiveness of internal control over the assigned processes performed by service organizations. Monitoring
activities related to service organizations may include the use of work performed by external parties. (GAO-14-
704G para 16.08)
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
2 CFR 200.303(e) states that the non-Federal entity must take reasonable measures to safeguard protected
personally identifiable information and other information the Federal awarding agency or pass-through entity
designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state,
local, and tribal laws regarding privacy and obligations of confidentiality.
AU-C Section 402.08 "Audit Considerations Relating to an Entity Using a Service Organization" defines a services
organization as an organization that provides services to user entities that are relevant to those user entities'
internal control over financial reporting.
CONDITION
The Department of Human Services contracts with Health Management Systems to exchange Medicaid
recipients information to inquire if those recipients maintain third party liability/health insurance coverage. The
Department of Human Services exchanges personal recipient information, however, has not received a System
and Organization Controls (SOC) report for Health Management System (HMS) since 2018, which was for the
time frame of March 1, 2017 to February 28, 2018. The Child Support Division also participates in the contract
with HMS to look for hits in the national health insurance database applicable to eligible child support
individuals for potential 3rd party liability.
II!
D - 20 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CAUSE
The HMS contract expired on September 30, 2017. Following procurement procedures, the new contract was
established with HMS. After the contract was reprocured, there was miscommunication among Department of
Human Services personnel on whether a SOC report was required or not with the current contract.
EFFECT
The lack of a SOC report for HMS, could lead to the Department of Human Services exchanging Medicaid
recipients' and eligible child support individuals' information with an outside service organization with potential
control weaknesses to protect personal information.
CONTEXT
There were 121,684 individuals that were Medicaid eligible during our audit period of July 1, 2018, through June
30, 2020. In addition, the Child Support Division submits a monthly extract file to HMS which contains
approximately 50,000 children for whom there is an order for support. This extract file could include social
security numbers for the children, custodial parents, and noncustodial parents.
RECOMMENDATION
We recommend the Department of Human Services ensures SOC reports are obtained on all outside service
organizations on a regular, consistent basis.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Material Weakness - Material Noncompliance
Finding 2020-009
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Special Tests and Provisions
Questioned Cost: $0
CRITERIA
45 CFR 98.41(1)(i)(A) states lead agencies shall assure that children receiving services under the CCDF are age-
appropriately immunized. Those health and safety provisions shall incorporate the latest recommendation for
childhood immunization of the respective state. Lead agencies may exempt: (1) Children who are cared for by
relatives, provided there are no other unrelated children who are cared for in the same setting. (2) Children who
II!
D - 21 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
receive care in their own homes, provided there are no other unrelated children who are cared for in the home.
(3) Children whose parents object to immunization on religious grounds. (4) Children whose medical condition
contraindicates immunization.
45 CFR 98.41(iv) requires prevention and response to emergencies due to food and allergic reactions. Allergic
reactions are identified on the Statement of Health for each individual child.
45 CFR 98.41 states that lead agencies must certify that procedures are in effect to ensure that child care providers,
for which assistance is provided under the Child Care Assistance Program, comply with all applicable health
and safety requirements.
North Dakota Century Code section 50-11.1-07 requires a licensee to maintain records as the Department
prescribes regarding each child, and shall report to the Department or the Department's authorized agent, when
requested, upon forms furnished by the Department, facts the Department may require with reference to each
child.
CONDITION
The Department of Human Services does not ensure that child care providers have records for enrolled children
as identified by Federal health and safety requirements. Required records include immunization records and a
statement of health for each child enrolled with the provider. Of 83 licenses tested, 27 were either missing records
or did not have documentation identifying records were reviewed during the licensing process resulting in a
33% error rate.
CAUSE
Department approval of child care licenses does not include verification that county licensors reviewed required
child care records and ensured missing documentation was obtained.
EFFECT
Children could be at risk due to unidentified health concerns.
CONTEXT
During fiscal year 2017 and 2018, there were 2,174 licensed providers that received payments totaling $29.4
million.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-007 was reported in the immediate prior year.
RECOMMENDATION
We recommend the Department of Human Services develop procedures to ensure required child care records
are maintained by the child care provider.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 22 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-010
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Questioned Cost: $34,782
CRITERIA
North Dakota Administrative Code 75-02-01.3-10 states that the caretaker of each eligible child who receives or
is offered child care services for which financial assistance is provided through the child care and development
fund may choose the approved relative provider, registrant, holder of a self-declaration, or licensed provider of
services to that child.
Department of Human Services Child Care Assistance Policy Manual section 400-28-105-25 states that the
household's provider must be licensed (including military, tribal and out-of state), self-declared, or an approved
relative provider. The license must be current and have an expiration date later than the date of the Child Care
Assistance Provider's application.
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The Department of Human Services issued Child Care Assistance payments to providers that were improperly
licensed. The Department requires that an individual is either an approved relative, self-declared, or licensed
child care provider in order to receive payments. 27 of 83 provider licenses reviewed were determined to be
improperly licensed, an error rate of 33%. These providers received $34,782 in payments during the period of
improper licensure. These known questioned costs were not projected to the population as not all improperly
licensed providers received child care assistance payments during the period of being improperly licensed.
CAUSE
The Department has not designed consistent procedures to ensure licensing applications include all required
documents. In addition, they rely on the licensing process and do not perform sufficient independent
verifications that payments are issued to properly licensed providers.
II!
D - 23 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
EFFECT
Payments are being issued to child care providers that may not be eligible to receive them.
CONTEXT
During fiscal year 2017 and 2018, there were 2,174 licensed providers that received payments totaling $29.4
million.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-010 was reported in the immediate prior year. Finding 2016-021 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services ensure that child care providers have met all necessary
licensing requirements prior to issuing Child Care Assistance payments.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-011
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Special Tests and Provisions
Questioned Cost: $0
CRITERIA
North Dakota Century Code (NDCC) section 50-11.1-07.2 requires that the Department or the Department's
authorized agency issue a correction order whenever it is determined upon inspection that a program or
premises is not in compliance with this chapter or rules adopted under this chapter.
NDCC section 50-11.1-07.3 requires the Department or the Department's authorized agent shall re-inspect an
early childhood program issued a correction order under NDCC section 50-11.1-07.2, at the end of the period
allowed for correction.
45 CFR 98.41 requires that lead agencies must certify that procedures are in effect to ensure that providers serving
children who receive subsidies comply with all applicable health and safety requirements.
II!
D - 24 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The Department of Human Services is not properly monitoring corrective orders issued to child care providers
and performing re-inspections of identified deficiencies within specified time frames. Fifty-two of 520 (10%)
corrective orders issued during our audit period did not identify a date the orders were determined to be
corrected. In addition, 163 of 520 (31%) corrective orders were not re-inspected within the 24 hour, 20 day, or 60
day time frame allowed for correction.
CAUSE
The Department's procedures for monitoring the resolution of corrective orders is ineffective.
EFFECT
Child care providers are operating without proper follow up of corrective orders jeopardizing the health and
safety of children. In addition, the Department is not ensuring providers are meeting health and safety
requirements as required by 45 CFR section 98.41.
CONTEXT
During fiscal years 2019 and 2020, there were 1,944 licensed providers receiving payments from the Child Care
Assistance program.
The following list is the number of corrective orders issued by calendar year:
2020 - 70 (through July)
2019 – 314
2018 – 136
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-013 was reported in the immediate prior year. Finding 2016-026 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services develop procedures to monitor and ensure the resolution of
corrective orders including that resolution occurs within specified time frames.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 25 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-012
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Questioned Cost: $1,347
CRITERIA
45 CFR 75.403 states that in order to be allowable under Federal awards, a cost must be necessary and reasonable
for the performance of the Federal award. Duplicate payments are neither necessary nor reasonable.
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The Department of Human Services issued duplicate and other improper payments to child care providers
receiving payments from the Child Care Assistance program. We tested 60 payments and identified $1,347 of
improper payments. These errors projected to the remaining population of potential duplicate payments, would
result in additional likely questioned costs of $4,113.
The identified circumstances are as follows:
• 3 Duplicate payments were made due to a system defect in SPACES that caused a second payment to
be paid for 3 cases. This resulted in duplicate payments of $859.
• 7 Duplicate payment were made when a case worker did not notice that a payment had already been
sent out. This resulted in duplicate payment of $488.
CAUSE
The Department does not have proper procedures in place to detect and prevent duplicate or improper payments
from being issued.
EFFECT
The Department issued payments that were not allowable under the Child Care Development Block Grant.
II!
D - 26 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONTEXT
The audit identified 1,031 potential duplicate payments totaling $147,251 during the audit period. 10 out of the
60 potential duplicate payments tested were errors totaling $1,347.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-011 was reported in the immediate prior year. Finding 2016-022 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services develop and implement procedures to detect and prevent
duplicate and other improper payments from being issued under the Child Care Assistance program.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-013
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2019G996005, 2019G999004, G2019G999005 (2019)
and Year(s): 2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Eligibility
Questioned Cost: $1,698
CRITERIA
45 CFR 98.68(c) states that lead agencies must have procedures in place for documenting and verifying eligibility.
45 CFR 98.45(k) states that lead agencies shall establish a sliding fee scale, based on family size, income, and
other appropriate factors, that provides for cost sharing by families that receive CCDF child care services.
45 CFR 98.20(a) states that children must be under age 13, reside with a family whose income does not exceed 85
percent of State/territorial/tribal median income for a family of the same size, and reside with a parent who is
working or attending a job training or education program; or are in need of, or are receiving protective
services. Lead agencies may choose to provide services during period of job search.
CONDITION
The Department of Human Services did not properly determine eligibility in 5 of 60 child care assistance cases
tested by the auditor. Each of the cases had one or more of the following errors: improperly calculated household
II!
D - 27 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
income, missing birth records, and missing income verifications. The errors resulted in improper payments
totaling $1,698. When projected against the entire population, the projected error is $873,187.
CAUSE
The Department did not collect or maintain proper documentation to determine eligibility. In addition, data
entry and income calculations were not being completed consistently and accurately.
EFFECT
Unallowable payments were made to providers on behalf of individuals whose eligibility for the Child Care
Assistance Program were not proper.
CONTEXT
There were 5,694 cases that received over $29.3 million in payments for fiscal years ended June 30, 2019 and 2020.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-012 was reported in the immediate prior year. Findings 2016-018, 2016-028, 2014-020, 2014-
017, 2012-018, 2012-024, 2010-022, 2008-006 were made in previous years.
RECOMMENDATION
We recommend the Department of Human Services:
1. Develop and implement controls to ensure that all eligibility workers are collecting and maintaining all
applicable information for Child Care Assistance eligibility determinations, and
2. Properly determine eligibility for individuals receiving Child Care Assistance and issue payments that
comply with requirements set in the Code of Federal Regulations for Child Care Development Funds.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 28 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Material Weakness - Material Noncompliance
Finding 2020-014
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Special Tests and Provisions
Questioned Cost: $0
CRITERIA
45 CFR 98.41 states that lead agencies must certify that procedures are in effect to ensure that child care providers,
for which assistance is provided under the Child Care Assistance Program, comply with all applicable health
and safety requirements.
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The Department of Human Services is not ensuring child care centers, self-declared, group, preschool, and
school-age providers comply with all health and safety standards as defined by North Dakota Administrative
Code. The checklists used by county licensors, when conducting annual on-site licensing studies, do not contain
all necessary health and safety requirements. The licensing study does not include items related to the following
health and safety standard requirements: prevention and control of infectious diseases; prevention of sudden
infant death syndrome and use of safe sleeping practices; administration of medication, consistent with
standards of parental consent; prevention and responses to emergencies due to food and allergic reaction;
building and physical premises safety, including identification and protection from hazards, bodies of water,
and vehicular traffic; prevention of shaken baby syndrome, abusive head trauma, and child maltreatment;
emergency preparedness and response planning; appropriate precautions if transporting children; pediatric first
aid and cardiopulmonary resuscitation; and recognition of child abuse & neglect.
CAUSE
The Department did not update licensing materials to include verification that all required health and safety
standards were met prior to licensing.
EFFECT
Child care providers may be operating without complying with health and safety requirements, potentially
jeopardizing the health and safety of children.
II!
D - 29 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONTEXT
Disbursements for the fiscal years ended June 30, 2019 and 2020 totaled $29,366,169 for the CCDF program. The
State of North Dakota had 1,944 licensed providers and 230 self declared providers during the audit period.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-014 was reported in the immediate prior year. Finding 2016-029 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services:
1. Update the licensing study to include requirements for all necessary health and safety standards for child
care centers, self-declared, group, preschool, and school-age providers, and
2. Ensure providers meet all health and safety standards required to be licensed.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Other Noncompliance
Finding 2020-015
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Special Tests and Provisions
Questioned Cost: $0
CRITERIA
45 CFR 98.42 requires that not less than annually, an unannounced inspection for compliance with child care
licensing standards, which shall include an inspection for compliance with health and safety and fire standards,
shall be completed.
Department policy 620-01-116 states, the authorized agent is required to perform an unannounced review at least
annually for each licensed or self-declared child care provider.
II!
D - 30 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONDITION
The Department of Human Services is not performing annual unannounced inspections of self-declared child
care providers in operation. An annual unannounced inspection was not completed on 10 of 23 self-declared
providers that were tested.
CAUSE
The Department's procedures for ensuring unannounced visits are performed annually by county licensors are
ineffective.
EFFECT
Child care providers are operating child care facilities without proper monitoring of whether health and safety
conditions have been met.
CONTEXT
During fiscal years 2019 and 2020, there were 230 self-declared providers from the Child Care Assistance
program.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-017 was reported in the immediate prior year. Finding 2016-027 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services perform annual unannounced inspections of self-declared
child care providers in operation as required by the Code of Federal Regulations and Department policy.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 31 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency
Finding 2020-016
Federal Program: CCDF Cluster
CFDA #: 93.575, 93.596
Federal Award Number(s) 2018G996005, 2018G999004, G2018G999005 (2018)
and Year(s): 2019G996005, 2019G999004, G2019G999005 (2019)
2020G996005, 2020G999004, 2020G999005 (2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Special Tests and Provisions
Questioned Cost: $0
CRITERIA
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
The Department's Early Childhood Services Quality Assurance Policy (620-01-20-20) requires the regional office
to perform random provider reviews on an annual basis with the authorized agent.
CONDITION
The Department of Human Services' monitoring procedures of the county licensors of child care providers is
ineffective. The Department's Early Childhood Services supervisors perform procedural reviews of county
licensor activities. The selection procedures do not include assurance that activities of all county licensors are
reviewed. In addition, errors identified during our testing indicate these reviews are clearly ineffective at
identifying material weaknesses and inconsistencies. These errors include nonperformance of unannounced
visits, lack of monitoring of corrective orders, and improperly licensed providers.
CAUSE
The Department has not designed monitoring procedures to carry out the purpose of licensing early childhood
service providers to safeguard the health, safety, and development of children.
EFFECT
Child care providers are operating without complying with licensing requirements and proper monitoring of
health and safety conditions which may jeopardize the health and safety of children.
CONTEXT
The Child Care Assistance program has 5 regional representatives. DHS has created county zone areas
throughout the State. This structure has not been fully implemented by assigning zones and responsibilities and,
until it is, this finding applies to the regional supervisor responsibilities according to DHS policy.
II!
D - 32 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-018 was reported in the immediate prior year. Finding 2016-025 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services perform effective monitoring procedures to ensure all
functions of the Child Care Assistance program are properly completed including monitoring correction orders,
completing unannounced visits, and properly licensing providers.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-017
Federal Program: TANF Cluster
CFDA #: 93.558
Federal Award Number(s) and Year(s): 1901NDTANF, 2001NDTANF (2019, 2020)
Federal Agency: U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions
Questioned Cost: Unknown
CRITERIA
45 CFR §261.60 states: (a) A State must report the actual hours that an individual participates in an activity,
subject to the qualifications in paragraphs (b) and (c) of this section and §261.61(c). It is not sufficient to report
the hours an individual is scheduled to participate in an activity.
45 CFR §261.61 states: (a) A State must support each individual's hours of participation through documentation
in the case file. In accordance with §261.62, a State must describe in its Work Verification Plan the documentation
it uses to verify hours of participation in each activity.
North Dakota’s Work Verification Plan outlines the use of JOBS Employment Contractors to determine the
individual’s hours of participation. The process includes sampling of the JOBS Employment Contractor work to
ensure accuracy.
45 CFR §261.20 states: (c) If the data show that a State met both participation rates in a fiscal year, then the
percentage of historic State expenditures that it must expend under TANF, pursuant to §263.1 of this chapter,
decreases from 80 percent to 75 percent for that fiscal year. This is also known as the State's TANF “maintenance-
of-effort” (MOE) requirement.(d) If the data show that a State did not meet a minimum work participation rate
for a fiscal year, a State could be subject to a financial penalty.
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D - 33 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONDITION
The Department of Human Services (DHS) is not in compliance with the Work Verification Plan in regards to
monitoring data used to calculate the work participation rate.
The work participation rate effects the maintenance-of-effort requirement and could result in sanctions if
minimum work participation rates are not met.
DHS contracts with Job Opportunities and Basic Skills (JOBS) Employment Contractors to verify work
verification documents provided by the client in meeting their work participation hours requirements. This
sampling was halted during SPACES implementation.
DHS uses this information to report data on their State Work Participation Rates on the ACF-199 report.
CAUSE
Since SPACES went live, DHS has fallen behind on sending cases to the JOBS work contractors for audit and
therefore audits and results thereof are not available.
EFFECT
DHS's reported Work Participation Rates could be incorrectly calculated which could result in additional
maintenance-of-effort requirements and Federal sanctions.
CONTEXT
No sampling was provided by the Department of Human Services to the JOBS contractors following the March
2019 implementation of the SPACES eligibility system (February 2019 was last monthly sample).
RECOMMENDATION
We recommend the Department of Human Services ensure compliance with the Work Verification Plan. This
includes the JOBS verification of TANF cases and maintenance of results for work participation status accuracy.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 34 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-018
Federal Program: Foster Care - Title IV-E
CFDA #: 93.658
Federal Award Number(s) and Year(s): 2019G994107, 2020G994107 (2019, 2020)
Federal Agency: U.S. Department of Health and Human Services
Administration for Children and Families
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
Per Title 2 CFR 200.331, pass-through entities are required to "(b) Evaluate each subrecipient's risk of
noncompliance with Federal statutes, regulations, and terms and conditions of the subaward for purposes of
determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which
may include consideration of such factors as:
(1) The subrecipient's prior experience with the same or similar subawards;
(2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance
with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been
audited as a major program;
(3) Whether the subrecipient has new personnel or new or substantially changed systems; and
(4) The extent and results of Federal awarding agency monitoring (eg. if the subrecipient also receives Federal
awards directly from a Federal awarding agency)."
45 CFR 75.303 states that the non-Federal entity must establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The Department of Human Services (DHS) risk assessment process of subrecipients is insufficient. DHS did
complete a risk assessment for every subrecipient, but the risk assessments are not being used to determine the
nature and extent of subrecipient monitoring.
CAUSE
The Department of Human Services has developed policies and procedures to determine the nature and extent
of subrecipient monitoring to be performed but the policies and procedures do not take into account the results
of the risk assessments performed.
EFFECT
DHS may be performing insufficient subrecipient monitoring of high risk subrecipients.
II!
D - 35 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONTEXT
Payments to subrecipients under the Foster Care program totaled $10,160,284 during fiscal years 2019 and 2020.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-035 was reported in the immediate prior year. Finding 2016-060 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services ensure subrecipient risk assessments are used to determine
the nature and extent of subrecipient monitoring.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-019
Federal Program: Rehabilitation Services - Vocational Rehabilitation Grants to States
CFDA #: 84.126
Federal Award Number(s) H126A180051 (2018)
and Year(s):
Federal Agency: U.S. Department of Education
Compliance Requirement: Period of Performance
Questioned Cost: $94,081
CRITERIA
The following criteria note that Federal funds must be obligated by the end of the two-year period of performance
window and those obligations must be liquidated within 90 days after the end date of period of performance.
2 CFR 200.343 requires:
" Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal
entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after
the end date of the period of performance as specified in the terms and conditions of the Federal award.
34 CFR 361.64 requires:
" (a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that
are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State
by the beginning of the succeeding fiscal year and any program income received during a fiscal year that is
not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by
the State during that succeeding fiscal year.
II!
D - 36 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
(b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year
only to the extent that the State met the matching requirement for those Federal funds by obligating, in
accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were
appropriated."
The following criteria pertains to the establishment and maintenance of effective internal control to ensure
payments are made within the correct period of performance.
45 CFR 75.303 states the non-Federal entity must, "establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award."
CONDITION
The Department of Human Services made payments under the Vocational Rehabilitation program outside of the
2018 grant award period of performance which was 10/1/17 - 9/30/19 with an allowable liquidation period, to
pay for obligations, through 12/31/19. Payments made after the liquidation period totaled $94,081 for the 2018
grant.
CAUSE
The Department of Human Services, Vocational Rehabilitation Program, did not properly update speedcharts,
which provide for automated coding within the State's accounting system, at its Regional Human Service
Centers. This issue was noted in three of the four errors found in sampling and permitted unallowable costs to
be charged to the 2018 Federal grant. The final error was due to improper coding when the payment was entered
into the system. In addition, review of the program's internal controls regarding period of performance proved
inadequate to detect payments made outside of the period of performance as documentation of the review to
ensure expenditures are applied to the correct period of performance was not maintained.
EFFECT
Unallowable costs totaling $94,081 were charged to the grant and are questioned costs.
CONTEXT
The Department of Human Services, Vocational Rehabilitation program, had expenditures of approximately $7.6
million from the 2018 grant award during the audit period. Of this amount, $94,081 was identified as a known
questioned cost from 66 payments. These are all payments after the period of performance.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-031 was reported in the immediate prior year. Finding 2016-053 was made in the previous year.
RECOMMENDATION
We recommend the Department of Human Services implement procedures to prevent and detect Vocational
Rehabilitation payments from occurring outside the period of performance.
DEPARTMENT OF HUMAN SERVICES RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 37 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Department of Public Instruction
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-020
Federal Program: Special Education Cluster
CFDA #: 84.027, 84.173
Federal Award Number(s) H027A150049, H027A160049, H027A170049, H027A180049, H173A150094,
and Year(s): H173A160094, H173A170094, H173A180094 (2016, 2017, 2018, 2019)
Federal Agency: U.S. Department of Education
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
2 CFR 200.331(d) states that all pass through entities must monitor the activities of the subrecipient as necessary
to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations,
and the terms and conditions of the subaward. Pass through entity monitoring of the subrecipient must include
following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies
pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through
audits.
Standards for Internal Control in the Federal Government (Green Book) require management to establish and
operate monitoring activities to monitor the internal control system and evaluate the results. (GAO-14-704G
para 16.01)
CONDITION
The Department of Public Instruction is not ensuring timely and appropriate action was taken on deficiencies
noted during fiscal subrecipient monitoring of the Special Education Cluster. During testing of subrecipient
monitoring, we noted 3 of the 8 subrecipients tested each had one monitoring finding, but no timely follow-up
procedures were completed by the Department to ensure the findings were resolved.
CAUSE
The tracking spreadsheet for fiscal subrecipient monitoring only includes when the audit was completed or when
it is planned. There is no tracking of the results, if there were recommendations, and if any follow-up was
completed on those recommendations.
EFFECT
If deficiencies are not resolved, subrecipients receiving Federal funds may not be in compliance with Federal
statutes, regulations, and the terms and conditions of the subaward.
II!
D - 38 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONTEXT
The Department of Public Instruction paid approximately $59 million in Federal funds between 07/01/2018-
06/30/2020 to over 30 Special Education Cluster subrecipients. During the audit period 23 subrecipients received
fiscal monitoring procedures.
RECOMMENDATION
We recommend the Department of Public Instruction strengthen fiscal subrecipient monitoring procedures for
the Special Education Cluster to ensure timely and appropriate action is taken on deficiencies noted during the
fiscal review.
DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-021
Federal Program: Commodity Supplemental Food Program, Emergency Food
Assistance Program (Administrative Costs), School Breakfast
Program, National School Lunch Program, Child and Adult Care
Food Program, Summer Food Services Program for Children,
Fresh Fruit and Vegetable Program
CFDA #: 10.565, 10.568, 10.553, 10.555, 10.558, 10.559, 10.560, 10.582
Federal Award Number(s) and Year(s): 3ND810817, 3ND810827, 3ND300309, 3ND310378 (2017,
2018)
Federal Agency: U.S. Department of Agriculture (USDA)
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
2 CFR 200.331(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2
CFR 200 Subpart F.
2 CFR 200.331(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate
action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through
entity through audits, on-site reviews, and other means.
2 CFR 200.521(d) states that a pass-through entity must issue a management decision within six months of
acceptance of the audit report by the Federal Audit Clearinghouse (FAC).
II!
D - 39 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Standards for Internal Control in the Federal Government (Green Book) require management to establish and
operate monitoring activities to monitor the internal control system and evaluate the results. (GAO-14-704G
para 16.01)
CONDITION
The Department of Public Instruction did not ensure that all subrecipients were audited under 2 CFR 200 Subpart
F as applicable.
For two subrecipients who received a total of $2,288,238 in Federal funds from the Department of Public
Instruction during Fiscal Year 2018, the Department did not ensure that the necessary audits were completed,
issue management decisions within a timely manner, or ensure corrective action was taken on any deficiencies
identified. One of these subrecipients did submit an audit into the Federal audit clearinghouse and there were
five recommendations to review. The other subrecipient never had an audit completed.
For three subrecipients who received a total of $625,464 in Federal funds from the Department of Public
Instruction during Fiscal Year 2018, the Department did not issue management decisions within a timely manner
or ensure corrective action was taken on any deficiencies identified. All three subrecipients submitted an audit
to the Federal audit clearinghouse and one of the three subrecipients had a total of 14 audit recommendations.
The remaining two subrecipients did not have any audit recommendations.
CAUSE
The Department of Public Instruction is not completing all elements of the tracking spreadsheet or reviewing the
spreadsheet to ensure all subrecipients are included, management decisions are done within six months, and
that appropriate and timely corrective action is being taken by the subrecipients.
EFFECT
Subrecipients spending more than $750,000 from all Federal sources may not be obtaining audits as required or
implementing a corrective action plan in a timely manner if findings are noted in audits that were completed.
CONTEXT
The Department of Public Instruction disbursed Federal dollars to a total of 258 subrecipients during Fiscal Year
2018 that received $25,000 or more in Federal funds. We sampled 60 of these subrecipients which resulted in 5
errors for an error rate of 8.3%.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-041 was reported in the immediate prior year.
RECOMMENDATION
We recommend the Department of Public Instruction:
• Ensure all subrecipients obtain audits in accordance with 2 CFR 200 Subpart F if they meet the
requirements,
• Issue management decisions within a timely manner, and,
• Ensure subrecipients took timely corrective action on deficiencies identified in the audits.
II!
D - 40 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Other Noncompliance
Finding 2020-022
Federal Program: Title I Grants to Local Educations Agencies, Twenty-First Century Community Learning
Centers, Special Education Cluster, Child Nutrition Cluster, Child and Adult Care Food
Program, Supporting Effective Instruction State Grant
CFDA #: 84.010, 84.287, 84.027, 84.173, 10.553, 10.555, 10.556, 10.559, 10.558, 84.367
Federal Award Number(s) S010A180034, S010A180034 - 18A, S287C180034, H027A180049, H027A180049 - 18A,
and Year(s): H173A180094 (2018)
S010A190034, S010A190034 - 19A, S287C190034, H027A190049, H027A190049 - 19A,
H173A190094, S367A190033, S367A190033 - 19A (2019)
3ND300309 (2020)
Federal Agency: U.S. Department of Education
U.S. Department of Agriculture (USDA)
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
31 U.S.C 7502(f)(2)(A) states that each pass-through entity shall provide subrecipients the Federal requirements
which govern the use of such awards.
2 CFR 200.332 states the required information that pass-through entities must disclose. This includes information
related to Federal award identification, requirements imposed by the pass-through entity on the subrecipient,
any additional requirements, approved Federally recognized indirect cost rate, requirements that the
subrecipient allow access to records, and appropriate terms and conditions concerning closeout of the subaward.
CONDITION
The Department of Public Instruction did not make subrecipients aware of all required grant award information
for the Title I Grants to Local Education Agencies, Twenty-First Century Community Learning Centers, Special
Education Cluster, Child Nutrition Cluster, Child and Adult Care Food Program, and Supporting Effective
Instruction State Grant.
• Title I Errors
o Missing information for all 40 tested grant awards:
Identification of whether the award is R&D,
II!
D - 41 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Whether there were are any additional requirements that the pass-through entity
imposes on the subrecipient in order for the pass-through entity to meet its own
responsibility to the Federal awarding agency including identification of any required
financial and performance reports,
Appropriate terms and conditions concerning closeout of the subaward.
o 1 out of the 40 in the sample had an incorrect DUNS number on the grant award.
• 21st Century Errors:
o Missing information on 2 of 3 tested grant awards:
1 instance of incorrect Subrecipient name (which must match the name associated with
its unique entity identifier);
2 instances of missing Federal Award Date of award to the recipient by the Federal
agency;
• Special Ed Errors
o Missing information for all 15 tested grant awards:
Federal Award Date of award to the recipient by the Federal agency
CFDA Number and Name; the pass-through entity must identify the dollar amount
made available under each Federal award and the CFDA number at time of
disbursement
o 1 out of the 15 in the sample had a DUNS number error.
• Child Nutrition Cluster and Child and Adult Care Food Program Errors:
o Missing information for all 14 tested grant awards::
Federal Award Identification Number (FAIN),
Subaward Period of Performance Start and End Date,
Amount of Federal Funds Obligated by this action by the pass-through entity to the
subrecipient,
Total Amount of Federal Funds Obligated to the subrecipient by the pass-through
entity including the current obligation,
Total Amount of the Federal Award committed to the subrecipient by the pass-through
entity,
Name of Federal awarding agency, pass-through entity, and contact information for
awarding official of the Pass-through entity,
II!
D - 42 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Identification of whether the award is R&D,
Indirect cost rate for the Federal award (including if the de minimis rate is charged),
Whether there are any additional requirements that the pass-through entity imposes
on the subrecipient in order for the pass-through entity to meet its own responsibility
to the Federal awarding agency including identification of any required financial and
performance reports,
An approved Federally recognized indirect cost rate negotiated between the
subrecipient and the Federal Government or, if no such rate exists, either a rate
negotiated between the pass-through entity and the subrecipient, or a de minimis
indirect cost rate, and
Appropriate terms and conditions concerning closeout of the subaward.
• Supporting Effective Instruction State Grant Errors
o Missing information for all 11 tested grant awards:
Identification of whether the award is R&D,
Whether there are any additional requirements that the pass-through entity imposes
on the subrecipient in order for the pass-through entity to meet its own responsibility
to the Federal awarding agency including identification of any required financial and
performance reports, and
Appropriate terms and conditions concerning closeout of the subaward.
CAUSE
For the Child Nutrition Cluster and Child and Adult Care Food Program, the program agreement or NDFoods
system were not updated following the prior audit finding. The individual responsible for updating the program
agreement and NDFoods system indicated they were not aware that changes were to be made from the prior
audit finding.
For the Title I Grants to Local Education Agencies and Supporting Effective Instruction State Grant, the
consolidated application in STARS system was not updated for all required grant award information. The R &
D field was missed when requesting updates to the consolidated application in STARS following the prior audit
finding. Also, the program staff indicated they were not aware the consolidated application was being cut-off
from view in STARS so the entire application and award information could not be seen.
For the Twenty-First Century Community Learning Centers program and the Special Education Cluster, data
entry errors caused incorrect award information to be entered into the award agreement.
EFFECT
Subrecipients may not have been aware of all necessary grant information and requirements.
II!
D - 43 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CONTEXT
The number of grant agreements during the time period analyzed is listed below. The time period was July 1,
2018 to June 30, 2020 for all programs listed except for programs D - F. For these programs, the number of grant
agreements below are for the time period of July 1, 2019 to June 30, 2020.
A. The Title I Grants to Local Education Agencies: 274
B. The Twenty-First Century Community Learning Centers: 11
C. The Special Education Cluster program: 123
D. The Child Nutrition Cluster: 203
E. The Child and Adult Care Food Program: 104
F. The Supporting Effective Instruction State Grant: 117
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-042 was reported in the immediate prior year. Finding 2016-068 was made in the previous year.
RECOMMENDATION
We recommend the Department of Public Instruction ensure that subrecipients are made aware of all required
grant award information.
DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Other Noncompliance
Finding 2020-023
Federal Program: Child Nutrition Cluster
CFDA #: 10.553, 10.555, 10.559
Federal Award Number(s) 3ND300309 (2018)
and Year(s):
Federal Agency: U.S. Department of Agriculture (USDA)
Food and Nutrition Service
Compliance Requirement: Period of Performance
Questioned Cost: $32,523
CRITERIA
2 CFR 200.343(b) states unless the Federal awarding agency or pass-through entity authorizes an extension, a
non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar
days after the end date of the period of performance as specified in the terms and conditions of the Federal
award.
II!
D - 44 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
2 CFR 200.309 states a non-Federal entity may charge to the Federal award only allowable costs incurred during
the period of performance.
CONDITION
The Department of Public Instruction made payments after the period of performance. Although the underlying
obligations occurred within the period of performance, payments totaling $19,684 did not comply with the
Federal period of performance requirements for the Child Nutrition Cluster. These payments were made after
the 90 day payment period following the end of the applicable grant awards. There is also a payment of $12,839
which lacked documentation to determine if the underlying obligations occurred within the period of
performance and did not comply with the Federal period of performance liquidation period requirements for
the Child Nutrition Cluster. The projection on the known questioned costs of $32,523 is an additional $1,153 in
payments made after the period of performance.
CAUSE
For 2 out of 5 items tested, the Department of Public Instruction's system, NDFoods, and PeopleSoft, the state's
accounting system, did not properly communicate payment of claims. Two separate payments of the 5 items
tested were in error due to untimely identification of an incorrect reimbursement rate being applied to meals
which lead to a subsequent correction payment made after the period of performance. Finally, 1 additional
payment separate from the errors already identified, was an error due to a lack of documentation of the
transaction.
EFFECT
The Department of Public Instruction charged unallowable costs to the grant.
CONTEXT
26 of the 6,636 disbursements that were made by the Department of Public Instruction for the Child Nutrition
Cluster for grants that ended during fiscal years 2019 and 2020 were paid outside of the 90 day period of
performance.
IDENTIFICATION AS A REPEAT FINDING
Finding 2018-039 was reported in the immediate prior year.
RECOMMENDATION
We recommend the Department of Public Instruction ensure Child Nutrition Cluster obligations occur within
the period of performance and that payments are not made after the period of performance.
DEPARTMENT OF PUBLIC INSTRUCTION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 45 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
Department of Transportation
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-024
Federal Program: Enhanced Mobility of Seniors and Individuals with Disabilities, Metropolitan
Transportation Planning and State and Non-Metropolitan Planning and Research,
Buses and Bus Facilities Formula, Competitive, and Low or No Emissions Programs,
State and Community Highway Safety, National Priority Safety Programs, Highway
Planning and Construction, Formula Grants for Rural Areas and Tribal Transit Program
CFDA #: 20.513, 20.505, 20.526, 20.600, 20.616, 20.205, 20.509
Federal Award Number(s) ND-2016-009, ND-2016-001, ND-2016-008 (2016)
and Year(s):
ND-2017-007, 2017002, ND-2017-004, ND-2017-012, ND-2017-009, ND-2017-008,
8984154 (2017)
2018004, ND-2018-008, ND-2018-006, ND-2018-007 (2018)
69A37518300004020ND0, 69A3751830000405bNDL, 69A3751830000405dNDH
(2019)
Federal Agency: U.S. Department of Transportation
Federal Transit Administration
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: Unknown
CRITERIA
2 CFR 200.332(f) requires a pass-through entity to verify that every subrecipient is audited as required by 2 CFR
200 Subpart F and (g) consider whether the results of the subrecipient's audits necessitate adjustments to the
pass-through entity's own records and (h) consider taking enforcement action against noncompliant
subrecipients.
Standards for Internal Control in the Federal Government” (Green Book) requires management assign
responsibilities and perform ongoing monitoring of the design and operating effectiveness of the internal control
as part of the normal course of operations. Management must also communicate policies and procedures to
personnel so that personnel can implement the control activities for their assigned responsibilities and ensure
corrective actions. (Green Book, para. 3.07, 12.02, 12.04, 16.05, 17.05)
CONDITION
The North Dakota Department of Transportation failed to adequately track which subrecipients required
Uniform Guidance audits and review audit reports for findings within 6 months.
II!
D - 46 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
CAUSE
The client inadvertently failed adequately follow-up with subrecipients to determine if a Single Audit report was
required and also failed to adequately review the reports that were reported for any issues related to Department
grants.
EFFECT
Subrecipients spending more than $750,000 from all sources including the Department of Transportation may
not be obtaining audits as required and issues related to Department of Transportation funding may be
unresolved.
CONTEXT
The Department of Transportation's subrecipient audit tracking spreadsheets following state fiscal years 2018
and 2019, the Department identified 131 and 117 subrecipients, respectively, each year. The Department's
tracking for fiscal year 2018 identified certifications and all further audit documentation was not received for 9
subrecipients as well as 4 additional audits which were noted to have been completed, but no review by the
Department of Transportation's Audit Services was completed within 6 months. For fiscal year 2019,
certifications and all further audit documentation was not received for 11 subrecipients as well as 10 additional
audits which were noted to have been completed but no review by the Department of Transportation's Audit
Services was completed within 6 months.
RECOMMENDATION
We recommend the Department of Transportation identify annually, based on the subrecipient's fiscal year, all
subrecipients that spent $750,000 or more in Federal awards from all sources through developed certification
procedures. We also recommend the Department of Transportation ensure the certification tracking method is
completed, to ensure all required audits are completed within nine months of the subrecipient’s fiscal year end,
management decisions are issued within six months of receiving the audit report, and timely and appropriate
corrective action of all findings.
DEPARTMENT OF TRANSPORTATION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 47 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-025
Federal Program: Formula Grants for Rural Areas
CFDA #: 20.509
Federal Award Number(s) ND-2018-007-00, ND-2019-008-00, ND-2020-004-00 (2018, 2019, 2020)
and Year(s):
Federal Agency: U.S. Department of Transportation
Federal Transit Administration
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
2 CFR 200.332 (b) states that all pass-through entities must evaluate each subrecipient's risk of noncompliance
with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining
the appropriate subrecipient monitoring.
Standards for Internal Control in the Federal Government” (Green Book) requires management identify, analyze,
and respond to risks related to achieving the defined objectives. (Green Book, para. 7.01)
CONDITION
The Department of Transportation is not evaluating each subrecipient's risk of noncompliance with Federal
statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate
subrecipient monitoring.
CAUSE
The Department of Transportation indicated the cause was client oversight due to the fact the requirement was
not included in the previous state plan. However, the Department has since developed a risk assessment tool to
evaluate subrecipient's risk of noncompliance starting in 2021.
EFFECT
High-risk subrecipients may not be subjected to adequate monitoring procedures to ensure Federal funds were
used for authorized purposes in compliance with Federal statutes, regulations, and the terms and conditions of
the subaward.
CONTEXT
The Formula Grants for Rural Areas had 30 subrecipients in the audit period.
RECOMMENDATION
We recommend the Department of Transportation evaluate each subrecipient's risk of noncompliance with
Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the
appropriate subrecipient monitoring.
II!
D - 48 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
DEPARTMENT OF TRANSPORTATION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
FINDING TYPE: Other Noncompliance
Finding 2020-026
Federal Program: Formula Grants for Rural Areas
CFDA #: 20.509
Federal Award Number(s) ND-2018-007-00, ND-2019-008-00, ND-2020-004-00 (2018, 2019, 2020)
and Year(s):
Federal Agency: U.S. Department of Transportation
Federal Transit Administration
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
2 CFR §200.332 Requirements for pass-through entities.
All pass-through entities must:
(a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following
information at the time of the subaward and if any of these data elements change, include the changes in
subsequent subaward modification. When some of this information is not available, the pass-through entity must
provide the best information available to describe the Federal award and subaward. Required information
includes:
(1) Federal award identification.
(i) Subrecipient name (which must match the name associated with its unique entity identifier);
(ii) Subrecipient's unique entity identifier;
(iii) Federal Award Identification Number (FAIN);
(iv) Federal Award Date (see the definition of Federal award date in §200.1 of this part) of award
to the recipient by the Federal agency;
(v) Subaward Period of Performance Start and End Date;
(vi) Subaward Budget Period Start and End Date;
(vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the
subrecipient;
(viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity
including the current financial obligation;
(ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through
entity;
(x) Federal award project description, as required to be responsive to the Federal Funding
Accountability and Transparency Act (FFATA);
II!
D - 49 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
(xi) Name of Federal awarding agency, pass-through entity, and contact information for
awarding official of the Pass-through entity;
(xii) Assistance Listings number and Title; the pass-through entity must identify the dollar
amount made available under each Federal award and the Assistance Listings Number at time
of disbursement;
(xiii) Identification of whether the award is R&D; and
(xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per
§200.414.
CONDITION
The Department of Transportation did not provide the subrecipient unique entity identifier, Federal award
identification number, and Federal award date as required by 2 CFR 200.332(a) related to Federal award
identification to subrecipients.
CAUSE
The previous grant agreements used for the Formula Grants for Other than Urbanized Areas program did not
contain the necessary information.
EFFECT
Subrecipients may not have the required information.
CONTEXT
The Formula Grants for Rural Areas had 30 subrecipients in the audit period.
RECOMMENDATION
We recommend the Department of Transportation ensure subrecipients are provided all required information
related to Federal award identification.
DEPARTMENT OF TRANSPORTATION RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 50 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
State Treasurer’s Office
FINDING TYPE: Significant Deficiency - Other Noncompliance
Finding 2020-027
Federal Program: Flood Control Act Lands and Minerals Leasing Act
CFDA #: 15.433, 15.437
Federal Award Number(s) Certification by ND SAO Mineral Royalty Audits (2018 and 2019)
and Year(s):
Federal Agency: U.S. Department of the Interior
Compliance Requirement: Subrecipient Monitoring
Questioned Cost: $0
CRITERIA
2 CFR 200.332(f) states that a pass-through entity must verify that every subrecipient is audited as required by 2
CFR 200 Subpart F.
2 CFR 200.332(d)(2) states that a pass-through entity must ensure subrecipients take timely and appropriate
action on all deficiencies detected through audits pertaining to the Federal award provided to the subrecipient
from the pass-through entity.
2 CFR 200.512 states that all audit reports must be completed and submitted within nine months of the end of
the audit period.
2 CFR 200.521 (d) states that a pass-through entity must issue a management decision within six months of
acceptance of the audit report by the Federal Audit Clearinghouse (FAC).
2 CFR 200.303 (a) states that the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award
in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
CONDITION
The State Treasurer's Office (STO) did not ensure that all subrecipients were audited under OMB 2 CFR 200
Subpart F as applicable.
For three of the four subrecipients tested who received a total of $18,978,662 in Federal funds from the State
Treasurer's Office during Fiscal Year 2018, the STO did not ensure that the necessary audits were completed,
issue management decisions within a timely manner, or ensure corrective action was taken on any deficiencies
identified.
II!
D - 51 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
For three of the four subrecipients tested who received a total of $45,815,902 in Federal funds from the State
Treasurer's Office during Fiscal Year 2019, the STO did not ensure that the necessary audits were completed,
issue management decisions within a timely manner, or ensure corrective action was taken on any deficiencies
identified.
CAUSE
The State Treasurer's Office does not have all the necessary monitoring procedures in place to ensure all the
subrecipient audit requirements are being met. The annual certification form that the State Treasurer's Office
utilizes does not have the subrecipient indicate if they spent $750,000 or more in Federal awards from all sources
during their fiscal year.
EFFECT
Subrecipients spending more than $750,000 from all Federal sources including the State Treasurer's Office may
not be obtaining audits as required or implementing a corrective action plan in a timely manner if findings are
noted in audits that were completed.
CONTEXT
The State Treasurer's Office (STO) did not receive audits for subrecipients that received a significant amount of
Federal funds from the STO. The State Treasurer's Office disbursed Federal dollars to a total of 26 subrecipients
during Fiscal Year 2018 and 21 subrecipients during Fiscal Year 2019 for a total of 47 subrecipients given
$86,704,892 for the two years. We sampled the audit report monitoring of 8 of these subrecipients. We found
noncompliance with monitoring for 6 of the 8 subrecipients tested for an error rate of 75%. These six subrecipients
that were missing audit reports had received $64,794,564 from the STO which is 75% of all dollars paid out to all
subrecipients for the 2 years ($64,794,564 / $86,704,892 = 75%).
RECOMMENDATION
We recommend the State Treasurer's Office identify annually, through a certification process, all subrecipients
that spent $750,000 or more in Federal awards from all sources during their fiscal year. We also recommend the
State Treasurer's Office enhance their existing tracking procedures to ensure all required audits are completed
within nine months of the subrecipient’s fiscal year end, management decisions are issued within six months of
receiving the audit report, and timely and appropriate corrective action is taken on all applicable findings.
STATE TREASURERS OFFICE RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 52 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
University System
FINDING TYPE: Other Noncompliance
Finding 2020-028
Federal Program: Higher Education Emergency Relief Fund
CFDA #: 84.425
Federal Award Number(s) and Year(s): LRSC - P425E202511, MASU - P425E204366, NDSCS -
P425E202841, WSC - P425E203267 (2020)
Federal Agency: U.S. Department of Education
Compliance Requirement: Reporting
Questioned Cost: $0
CRITERIA
Part 4 Section C of the Certification and Agreement states in part: "Recipient shall promptly comply with section
18004(e) of the CARES Act and (i) report to the Secretary thirty (30) days from the date of this certification and
agreement".
A May 6th Electronic Announcement from the Office of Post Secondary Education Regarding the Higher
Education Emergency Relief Funds Reporting states in part: "The Certification and Agreement directs each
institution applying for HEERF funds to comply with Section 18004(e) of the CARES Act and submit an initial
report (the “30-day Fund Report”) to the Secretary thirty (30) days from the date of the institution’s Certification
and Agreement to the Department. The Department will provide instructions for providing the required
information to the Secretary in the near future. In the meantime, each HEERF participating institution must post
the information listed below on the institution’s primary website. The Department would like to receive the most
current information from the date when the institution received its allocation for emergency financial aid grants
to students, and the institution should have received its allocation within a few days after submitting the
Certification and Agreement. Accordingly, the following information must appear in a format and location that
is easily accessible to the public 30 days after the date when the institution received its allocation under
18004(a)(1) ".
CONDITION
Lake Region State College, Mayville State University and North Dakota State College of Science did not submit
their 30 day fund report to their web site within the required 30 days for the Higher Education Emergency Relief
Funds. Williston State College did not complete a 30 day fund report for the Higher Education Emergency Relief
Funds.
CAUSE
There was a lack of guidance regarding what information is to be reported and where to report.
II!
D - 53 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
State of North Dakota
Schedule of Federal Findings and Questioned Costs
Fiscal Years Ended June 30, 2019 and 2020
EFFECT
Information was not reported in a timely matter.
CONTEXT
Lake Region State College was three days late in reporting the $29,062 that had been distributed to date. Mayville
State University was nine days late in reporting the $35,500 that had been distributed to date. North Dakota State
College of Science was seven days late in reporting the $351,282 that had been distributed to date. Williston State
College did not report that they had not distributed any money to date.
RECOMMENDATION
We recommend that Lake Region State College, Mayville State University, North Dakota State College of Science,
and Williston State College comply with the reporting requirements of the Higher Education Emergency Relief
Fund.
UNIVERSITY SYSTEM RESPONSE/CORRECTIVE ACTION PLAN
See “Management’s Response and Corrective Action” section of this report.
II!
D - 54 |SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS
Single Audit Report
Auditee’s Section
S E C T I O N
A U D I T E E ’ S
Office of the
State Auditor
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Corporation For National And Community Service
Unclustered
Direct Programs:
94.003 State Commissions 60100 $ 63,903 $
94.006 AmeriCorps 60100 301,403 298,065
94.008 Commission Investment Fund 60100 52,475
94.009 Training and Technical Assistance 60100 4,582
Total for Unclustered $ 422,363 $ 298,065
Foster Grandparent/Senior Companion Cluster
Direct Programs:
94.011 Foster Grandparent Program 32500 $ 56 $
Total for Foster Grandparent/Senior Companion Cluster $ 56 $
Total For Corporation For National And Community Service $ 422,419 $ 298,065
Department Of Commerce
Unclustered
Direct Programs:
11.303 Economic Development Technical Assistance UND $ 105,609 $
11.549 State and Local Implementation Grant Program 11200 243,579
Total for Unclustered $ 349,188 $
Unclustered
Pass Through Non-State Entity:
11.U01 National Mesonet Program Prime Contract NDSU Synoptic Data Corp. S2017-0124 $ 251,818 $
11.U02 National Mesonet Program Prime Contract NDSU Synoptic Data Corp. S2020-141 41,196
Total for Unclustered $ 293,014 $
Economic Development Cluster
Direct Programs:
11.307 Economic Adjustment Assistance BSC $ 289,283 $
Total for Economic Development Cluster $ 289,283 $
E-1
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Research & Development Cluster
Direct Programs:
11.609 Measurement and Engineering Research and Standards NDSU $ 328 $
Total for Research & Development Cluster $ 328 $
Total For Department Of Commerce $ 931,813 $
Department Of Defense
Unclustered
Direct Programs:
12.002 Procurement Technical Assistance For Business Firms UND $ 189,754 $
12.112 Payments to States in Lieu of Real Estate Taxes 12000 187,298 187,298
12.401 National Guard Military Operations and Maintenance (O&M) 54000 33,284,145
Projects
12.903 GenCyber Grants Program NDSU 83,217 41,617
Nonmonetary Assistance:
12.401 National Guard Military Operations and Maintenance (O&M) 54000 $ 12,337 $
Projects
Total for Unclustered $ 33,756,751 $ 228,915
Unclustered
Direct Programs:
12.U01 Archaeological Services Midipaldi Butte Garrison 70100 W9128F-16-D-0043 Task $ 4,693 $
Order 0001
12.U02 Educational Service Agreement - Air Force UND F33600-99-A-0080 60,872
12.U03 Educational Service Agreement - Army UND W81K04-17-H-0099 192,125
12.U04 Flight Training Program SROTC Cadets UND MOA UND Flight Training 183,707
12.U05 Navy - Educational Service Agreement UND N00140-98-G2501 95,168
Total for Unclustered $ 536,565 $
Research & Development Cluster
Direct Programs:
12.300 Basic and Applied Scientific Research NDSU $ 207,603 $
12.420 Military Medical Research and Development UND 247,735 99,592
12.431 Basic Scientific Research NDSU 460,841
E-2
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
12.RD Cape Experiment 2019 (CapeEx19) UND N0017819C2609 765,346 83,254
12.RD DOA-ESTCP HygroscopicCoolTower UND W912HQ17C0050 330,229
Pass Through Non-State Entity:
12.225 Commercial Technologies for Maintenance Activities Program NDSU PPG Industries, Inc. 2018102-140967 $ 46,396 $
12.225 Commercial Technologies for Maintenance Activities Program NDSU PPG Industries, Inc. 201828-140912 85,127
12.225 Commercial Technologies for Maintenance Activities Program NDSU PPG Industries, Inc. 201852-140920 48,831
12.225 Commercial Technologies for Maintenance Activities Program NDSU PPG Industries, Inc. 201854-140922 70,980
12.225 Commercial Technologies for Maintenance Activities Program NDSU PPG Industries, Inc. 201926-140968 37,951
12.300 Basic and Applied Scientific Research UND Colorado State University G-00976-1 237,784
12.420 Military Medical Research and Development UND Institute for Clinical Research FCCC 22784-02 87,414
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201635-140828 36,472 4,746
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201637-140831 2,296
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201853-140921 198,874
12.RD Electronically Tunable Materials and Devices NDSU University of Dayton RSC17005 30,451
12.RD Electronically Tunable Materials and Devices Using Subwa NDSU Macaulay-Brown Inc PO:DSC6511-01 93,349
12.RD Experimental Investigation of the Effect of Sweep NDSU Ohio Aerospace Institute R-700-202370-41022 38,964
12.RD HMMWV Augmented Reality UND AM General, LLC PO 4800000814 194,859
Total for Research & Development Cluster $ 3,221,502 $ 187,592
Total For Department Of Defense $ 37,514,818 $ 416,507
Department Of Education
Unclustered
Direct Programs:
84.002 Adult Education - Basic Grants to States 20100 $ 836,086 $ 561,772
84.010 Title I Grants to Local Educational Agencies 20100 37,771,962 37,299,821
84.011 Migrant Education State Grant Program 20100 594,532 412,178
84.013 Title I State Agency Program for Neglected and Delinquent 20100 90,539
Children and Youth
84.031 Higher Education Institutional Aid MASU 458,511
84.048 Career and Technical Education -- Basic Grants to States 27000 4,932,261 2,641,551
E-3
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.126 Rehabilitation Services Vocational Rehabilitation Grants to 32500 16,255,038
States
84.144 Migrant Education Coordination Program 20100 71,829 55,286
84.161 Rehabilitation Services Client Assistance Program 32500 130,005
84.169 Independent Living - State Grants 32500 48,026 48,026
84.177 Rehabilitation Services Independent Living Services for Older 32500 439,955
Individuals Who are Blind
84.181 Special Education-Grants for Infants and Families 32500 2,942,744
84.187 Supported Employment Services for Individuals with the Most 32500 263,914
Significant Disabilities
84.196 Education for Homeless Children and Youth 20100 224,966 118,088
84.224 Assistive Technology 32500 224,096
84.240 Program of Protection and Advocacy of Individual Rights 36000 177,013
84.287 Twenty-First Century Community Learning Centers 20100 6,485,330 6,249,178
84.299 Indian Education -- Special Programs for Indian Children UND 343,307 36,000
84.325 Special Education - Personnel Development to Improve MISUB 238,885
Services and Results for Children with Disabilities
84.326 Special Education Technical Assistance and Dissemination to MISU 82,631
Improve Services and Results for Children with Disabilities
84.358 Rural Education 20100 87,655 87,655
84.365 English Language Acquisition State Grants 20100 407,758 241,990
84.367 Supporting Effective Instruction State Grants (formerly 20100 9,502,655 9,465,351
Improving Teacher Quality State Grants)
84.369 Grants for State Assessments and Related Activities 20100 2,290,664 12,475
84.371 Comprehensive Literacy Development 20100 8,308,999 7,936,712
84.372 Statewide Longitudinal Data Systems 20100 1,445,603
84.377 School Improvement Grants 20100 572,337 557,545
84.384 Statewide Data Systems, Recovery Act 20100 132,269
84.407 Transition Programs for Students with Intellectual Disabilities MISU 352,194
into Higher Education
84.424 Student Support and Academic Enrichment Program 20100 4,845,459 4,820,202
84.425 Education Stabilization Fund LRSC 283,382
E-4
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.425 Education Stabilization Fund 20100 353,957 353,957
84.425 Education Stabilization Fund MISUB 275,325
84.425 Education Stabilization Fund NDSCS 358,762
84.425 Education Stabilization Fund UND 5,491,551
84.425 Education Stabilization Fund DSU 350,628
84.425 Education Stabilization Fund BSC 625,581
84.425 Education Stabilization Fund WSC 313,541
84.425 Education Stabilization Fund MISU 1,020,193
84.425 Education Stabilization Fund NDSU 7,604,748
84.425 Education Stabilization Fund VCSU 433,371
84.425 Education Stabilization Fund MASU 43,058
Nonmonetary Assistance:
84.906 American Printing House for the Blind 25300 American Printing House for the Blind $ 107,691 $
Pass Through Non-State Entity:
84.010 Title I Grants to Local Educational Agencies UND Grand Forks Public School District Building N/A $ 88,347 $
Authority
84.371 Comprehensive Literacy Development NDSU Fargo Public Schools NDSRCL 1,003
84.411 Education Innovation and Research (formerly Investing in NDSU National Writing Project 14-ND02-2018iC3WP 1,423
Innovation (i3) Fund)
84.411 Education Innovation and Research (formerly Investing in NDSU National Writing Project 14-ND02-2019i3C3WP 68,111
Innovation (i3) Fund)
84.418 Promoting Readiness of Minors in Supplemental Security MISU Utah State Office of Rehabilitation 146213 16,036
Income
Total for Unclustered $ 117,993,931 $ 70,897,787
Research & Development Cluster
Pass Through Non-State Entity:
84.305 Education Research, Development and Dissemination UND California State University, Chico SUB18-059 $ 55,470 $
Total for Research & Development Cluster $ 55,470 $
Special Education Cluster (IDEA)
Direct Programs:
84.027 Special Education Grants to States 20100 $ 33,843,020 $ 30,377,280
E-5
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.173 Special Education Preschool Grants 20100 932,407 890,744
Pass Through Non-State Entity:
84.027 Special Education Grants to States 25200 North Dakota Department of Public N/A $ 25,609 $
Instruction
84.173 Special Education Preschool Grants 25200 North Dakota Department of Public N/A 1,006
Instruction
Total for Special Education Cluster (IDEA) $ 34,802,042 $ 31,268,024
Student Financial Assistance Cluster
Direct Programs:
84.007 Federal Supplemental Educational Opportunity Grants LRSC $ 20,786 $
84.007 Federal Supplemental Educational Opportunity Grants WSC 24,164
84.007 Federal Supplemental Educational Opportunity Grants MASU 75,009
84.007 Federal Supplemental Educational Opportunity Grants BSC 96,800
84.007 Federal Supplemental Educational Opportunity Grants DSU 147,288
84.007 Federal Supplemental Educational Opportunity Grants NDSU 832,638
84.007 Federal Supplemental Educational Opportunity Grants MISU 135,344
84.007 Federal Supplemental Educational Opportunity Grants VCSU 74,557
84.007 Federal Supplemental Educational Opportunity Grants MISUB 35,900
84.007 Federal Supplemental Educational Opportunity Grants NDSCS 173,428
84.033 Federal Work-Study Program LRSC 46,483
84.033 Federal Work-Study Program NDSCS 115,994
84.033 Federal Work-Study Program MISUB 43,842
84.033 Federal Work-Study Program UND 869,951
84.033 Federal Work-Study Program DSU 202,021
84.033 Federal Work-Study Program NDSU 392,583
84.033 Federal Work-Study Program WSC 24,344
84.033 Federal Work-Study Program MASU 58,044
84.033 Federal Work-Study Program VCSU 75,468
84.033 Federal Work-Study Program BSC 31,381
84.033 Federal Work-Study Program MISU 139,986
E-6
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.038 Federal Perkins Loan Program UND 12,987,100
84.038 Federal Perkins Loan Program MASU 596,762
84.038 Federal Perkins Loan Program MISUB 232,048
84.038 Federal Perkins Loan Program DSU 922,847
84.038 Federal Perkins Loan Program MISU 2,233,221
84.038 Federal Perkins Loan Program BSC 201,400
84.038 Federal Perkins Loan Program NDSU 6,393,689
84.038 Federal Perkins Loan Program NDSCS 1,067,206
84.038 Federal Perkins Loan Program LRSC 337,741
84.038 Federal Perkins Loan Program VCSU 703,917
84.038 Federal Perkins Loan Program WSC 127,801
84.063 Federal Pell Grant Program MASU 1,970,895
84.063 Federal Pell Grant Program WSC 1,254,860
84.063 Federal Pell Grant Program MISU 2,899,319
84.063 Federal Pell Grant Program BSC 2,662,274
84.063 Federal Pell Grant Program NDSCS 2,998,210
84.063 Federal Pell Grant Program VCSU 1,375,492
84.063 Federal Pell Grant Program LRSC 1,301,092
84.063 Federal Pell Grant Program NDSU 9,807,870
84.063 Federal Pell Grant Program MISUB 1,180,077
84.063 Federal Pell Grant Program DSU 1,581,511
84.063 Federal Pell Grant Program UND 8,981,874
84.268 Federal Direct Student Loans UND 71,147,487
84.268 Federal Direct Student Loans NDSCS 6,904,680
84.268 Federal Direct Student Loans WSC 1,252,161
84.268 Federal Direct Student Loans LRSC 2,051,497
84.268 Federal Direct Student Loans BSC 6,186,959
84.268 Federal Direct Student Loans MASU 3,970,155
84.268 Federal Direct Student Loans VCSU 4,606,025
E-7
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.268 Federal Direct Student Loans MISUB 2,039,784
84.268 Federal Direct Student Loans NDSU 50,763,907
84.268 Federal Direct Student Loans MISU 8,288,466
84.268 Federal Direct Student Loans DSU 4,120,665
84.379 Teacher Education Assistance for College and Higher MASU 35,365
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher UND 79,172
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher MISU 19,252
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher NDSU 15,008
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher VCSU 6,103
Education Grants (TEACH Grants)
Total for Student Financial Assistance Cluster $ 226,919,903 $
TRIO Cluster
Direct Programs:
84.042 TRIO Student Support Services DSU $ 291,147 $
84.042 TRIO Student Support Services NDSU 489,425
84.042 TRIO Student Support Services MISU 466,074
84.042 TRIO Student Support Services UND 389,633
84.042 TRIO Student Support Services LRSC 279,047
84.044 TRIO Talent Search UND 522,871
84.047 TRIO Upward Bound UND 353,951
84.047 TRIO Upward Bound NDSU 271,889
84.066 TRIO Educational Opportunity Centers UND 414,704
84.217 TRIO McNair Post-Baccalaureate Achievement UND 277,484
Total for TRIO Cluster $ 3,756,225 $
Total For Department Of Education $ 383,527,571 $ 102,165,811
E-8
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Department Of Energy
Unclustered
Direct Programs:
81.041 State Energy Program 60100 $ 187,483 $ 148,497
81.042 Weatherization Assistance for Low-Income Persons 60100 2,792,078 2,645,411
Total for Unclustered $ 2,979,561 $ 2,793,908
Unclustered
Direct Programs:
81.U01 Direct Restitution (Supplemental Crude Oil Overcharge Refund) 60100 N/A $ 3,872 $ 3,872
81.U02 State Heating Oil & Propane (SHOPP) 60100 DE-EI0002989 2,599
81.U03 Stripperwell Settlement (Petroleum Violation Escrow Funds) 60100 N/A 2,239
Total for Unclustered $ 8,710 $ 3,872
Research & Development Cluster
Direct Programs:
81.049 Office of Science Financial Assistance Program UND $ 113,331 $
81.057 University Coal Research UND 36,517 (1,435)
81.086 Conservation Research and Development UND 744,440 44,726
81.087 Renewable Energy Research and Development UND 410,690 229,494
81.089 Fossil Energy Research and Development UND 12,557,752 1,791,391
Pass Through Non-State Entity:
81.042 Weatherization Assistance for Low-Income Persons UND Nevada Department of Business and N/A $ 42,300 $
Industry
81.042 Weatherization Assistance for Low-Income Persons UND Nevada Rural Housing, Inc. N/A 6,135
81.049 Office of Science Financial Assistance Program UND Envergex LLC DE-SC0015204 97,842
81.049 Office of Science Financial Assistance Program UND Mainstream Engineering Corporation DE0522/PO# 0659069 2,566
81.049 Office of Science Financial Assistance Program UND Mainstream Engineering Corporation DE8580B 259,893
81.049 Office of Science Financial Assistance Program UND Physical Sciences Inc. SC80628-1964-46 6,453
81.049 Office of Science Financial Assistance Program UND Reaction Engineering International REI 8270-1 10,029
81.049 Office of Science Financial Assistance Program UND TDA Research, Inc. N/A 191,801
81.087 Renewable Energy Research and Development NDSU University of Oklahoma 2020-42 22,273
E-9
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
81.087 Renewable Energy Research and Development NDSU Washington State University 136936-G004139 9,342
81.089 Fossil Energy Research and Development UND Barr Engineering Company UND-DE-FE0031756-Period 1 178,301
81.089 Fossil Energy Research and Development UND Battelle Memorial Institute PO US001-0000726698 366,881
81.089 Fossil Energy Research and Development UND Gas Technology Institute S601 60,824
81.089 Fossil Energy Research and Development UND Membrane Technology and Research, Inc. 387-DOE-FE-0031632 11,212
81.089 Fossil Energy Research and Development UND Minnkota Power Cooperative Inc. PO#200336 131,722
81.089 Fossil Energy Research and Development UND Pennsylvania State University 5963-UND-DOE-6825 103,015
81.089 Fossil Energy Research and Development UND Pennsylvania State University S000045-USDOE 108,340
81.089 Fossil Energy Research and Development UND United Technologies Corporation PO 2606146 - 001 72,080
81.089 Fossil Energy Research and Development UND University of Alaska Fairbanks PO 528936 / Sub 19-0014 56,250
81.089 Fossil Energy Research and Development UND University of Wyoming 1004172-UND 1,649,583
81.121 Nuclear Energy Research, Development and Demonstration NDSU UT-Battelle, LLC 4000179773 5,320
81.RD Study of Tight Oil Properties UND Sandia Corporation 1515304 27
81.RD Technical Review and Input of NETL Research - Task 4 UND Leidos Holdings, Inc. P010227025 440,691
Total for Research & Development Cluster $ 17,695,610 $ 2,064,176
Total For Department Of Energy $ 20,683,881 $ 4,861,956
Department Of Health And Human Services
Unclustered
Direct Programs:
93.041 Special Programs for the Aging, Title VII, Chapter 3, Programs 32500 $ 183 $
for Prevention of Elder Abuse, Neglect, and Exploitation
93.042 Special Programs for the Aging, Title VII, Chapter 2, Long 32500 16,691
Term Care Ombudsman Services for Older Individuals
93.043 Special Programs for the Aging, Title III, Part D, Disease 32500 96,095
Prevention and Health Promotion Services
93.047 Special Programs for the Aging, Title VI, Part A, Grants to UND 217,086
Indian Tribes, Part B, Grants to Native Hawaiians
93.048 Special Programs for the Aging, Title IV, and Title II, MISU 221,922
Discretionary Projects
93.048 Special Programs for the Aging, Title IV, and Title II, UND 464,391
Discretionary Projects
E - 10
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.052 National Family Caregiver Support, Title III, Part E 32500 772,309
93.069 Public Health Emergency Preparedness 30100 4,585,944 1,990,319
93.071 Medicare Enrollment Assistance Program 40100 5,922
93.071 Medicare Enrollment Assistance Program MISU 68,338
93.072 Lifespan Respite Care Program 32500 80,806 6,370
93.079 Cooperative Agreements to Promote Adolescent Health 20100 91,658
through School-Based HIV/STD Prevention and School-Based
Surveillance
93.092 Affordable Care Act (ACA) Personal Responsibility Education NDSU 162,958 104,316
Program
93.103 Food and Drug Administration Research NDSU 29,024
93.103 Food and Drug Administration Research 60200 100,532
93.103 Food and Drug Administration Research 30100 71,978
93.107 Area Health Education Centers UND 303,657
93.110 Maternal and Child Health Federal Consolidated Programs 30100 303,284 157,340
93.116 Project Grants and Cooperative Agreements for Tuberculosis 30100 200,187 17,723
Control Programs
93.124 Nurse Anesthetist Traineeship UND 18,609
93.127 Emergency Medical Services for Children 30100 20,787
93.130 Cooperative Agreements to States/Territories for the 30100 153,363 3,000
Coordination and Development of Primary Care Offices
93.136 Injury Prevention and Control Research and State and 30100 408,493 205,889
Community Based Programs
93.137 Community Programs to Improve Minority Health Grant 30100 121,946
Program
93.138 Protection and Advocacy for Individuals with Mental Illness 36000 423,892
93.150 Projects for Assistance in Transition from Homelessness 32500 299,800
(PATH)
93.155 Rural Health Research Centers UND 134,429
93.165 Grants to States for Loan Repayment 30100 552,923 552,923
93.178 Nursing Workforce Diversity UND 543,573
93.211 Telehealth Programs UND 82,825
93.217 Family Planning Services 30100 1,558,282 1,166,976
E - 11
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.223 Development and Coordination of Rural Health Services UND 2,313,265 385,970
93.236 Grants to States to Support Oral Health Workforce Activities 30100 307,324 31,927
93.241 State Rural Hospital Flexibility Program UND 951,401 306,714
93.243 Substance Abuse and Mental Health Services Projects of 32500 1,865,474
Regional and National Significance
93.251 Early Hearing Detection and Intervention MISU 234,847 52,350
93.267 State Grants for Protection and Advocacy Services 36000 69,356
93.268 Immunization Cooperative Agreements 30100 1,929,519 488,024
93.270 Viral Hepatitis Prevention and Control 30100 138,395 47,795
93.283 Centers for Disease Control and Prevention Investigations and 30100 20,257
Technical Assistance
93.301 Small Rural Hospital Improvement Grant Program UND 423,194 353,628
93.305 PPHF 2018: Office of Smoking and Health-National State- 30100 925,080 71,219
Based Tobacco Control Programs-Financed in part by 2018
Prevention and Public Health funds (PPHF)
93.314 Early Hearing Detection and Intervention Information System MISU 150,030
(EHDI-IS) Surveillance Program
93.319 Outreach Programs to Reduce the Prevalence of Obesity in NDSU 468,391 84,137
High Risk Rural Areas
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases 30100 1,623,695
(ELC)
93.324 State Health Insurance Assistance Program 40100 208,142
93.336 Behavioral Risk Factor Surveillance System 30100 374,557
93.354 Public Health Emergency Response: Cooperative Agreement 30100 3,060,845 179,426
for Emergency Response: Public Health Crisis Response
93.366 State Actions to Improve Oral Health Outcomes and Partner 30100 582,282 180,870
Actions to Improve Oral Health Outcomes
93.387 National and State Tobacco Control Program 30100 3,869
93.423 1332 State Innovation Waivers 40100 8,000
93.426 Improving the Health of Americans through Prevention and 30100 1,660,563 790,633
Management of Diabetes and Heart Disease and Stroke
93.434 Every Student Succeeds Act/Preschool Development Grants 20100 1,108,301
93.498 Provider Relief Fund UND 55,003
E - 12
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.498 Provider Relief Fund NDSU 6
93.539 PPHF Capacity Building Assistance to Strengthen Public 30100 5,375
Health Immunization Infrastructure and Performance financed
in part by Prevention and Public Health Funds
93.556 Promoting Safe and Stable Families 32500 629,825 184,655
93.563 Child Support Enforcement 32500 12,502,219
93.564 Child Support Enforcement Research 32500 38,084
93.566 Refugee and Entrant Assistance State/Replacement Designee 32500 1,630,963 934,703
Administered Programs
93.568 Low-Income Home Energy Assistance 32500 21,264,555 488,163
93.569 Community Services Block Grant 60100 3,484,460 3,337,298
93.586 State Court Improvement Program 18000 259,711
93.590 Community-Based Child Abuse Prevention Grants 32500 275,258 71,280
93.597 Grants to States for Access and Visitation Programs 32500 108,136
93.599 Chafee Education and Training Vouchers Program (ETV) 32500 126,661
93.603 Adoption and Legal Guardianship Incentive Payments 32500 364,661
93.618 Voting Access for Individuals with Disabilities-Grants for 36000 121,157
Protection and Advocacy Systems
93.630 Developmental Disabilities Basic Support and Advocacy Grants 32500 404,966 54,984
93.630 Developmental Disabilities Basic Support and Advocacy Grants 36000 492,048
93.632 University Centers for Excellence in Developmental Disabilities MISU 629,796 20,899
Education, Research, and Service
93.643 Children's Justice Grants to States 32500 32,751 27,702
93.645 Stephanie Tubbs Jones Child Welfare Services Program 32500 75,967
93.658 Foster Care Title IV-E 32500 16,724,899 129,980
93.659 Adoption Assistance 32500 10,981,774 83,185
93.667 Social Services Block Grant 32500 3,689,223
93.669 Child Abuse and Neglect State Grants 32500 4,018
93.671 Family Violence Prevention and Services/Domestic Violence 30100 763,696 718,623
Shelter and Supportive Services
93.674 John H. Chafee Foster Care Program for Successful Transition 32500 555,988 488,841
to Adulthood
E - 13
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.732 Mental and Behavioral Health Education and Training Grants UND 461,666
93.735 State Public Health Approaches for Ensuring Quitline Capacity 30100 45,833
– Funded in part by Prevention and Public Health Funds
(PPHF)
93.747 Elder Abuse Prevention Interventions Program UND 88,278 51,972
93.767 Children's Health Insurance Program 32500 21,659,063
93.788 Opioid STR 32500 4,473,802 495,308
93.791 Money Follows the Person Rebalancing Demonstration 32500 2,026,653 215,450
93.817 Hospital Preparedness Program (HPP) Ebola Preparedness 30100 81,840 81,840
and Response Activities
93.843 ACL Assistive Technology State Grants for Protection and 36000 44,866
Advocacy
93.859 Biomedical Research and Research Training UND 299,655
93.889 National Bioterrorism Hospital Preparedness Program 30100 971,776 351,364
93.898 Cancer Prevention and Control Programs for State, Territorial UND 368,290
and Tribal Organizations
93.898 Cancer Prevention and Control Programs for State, Territorial 30100 2,121,352 226,740
and Tribal Organizations
93.913 Grants to States for Operation of State Offices of Rural Health UND 179,328
93.917 HIV Care Formula Grants 30100 2,273,864 450,399
93.940 HIV Prevention Activities Health Department Based 30100 844,080 49,574
93.946 Cooperative Agreements to Support State-Based Safe 30100 191,988
Motherhood and Infant Health Initiative Programs
93.958 Block Grants for Community Mental Health Services 32500 535,765 73,037
93.959 Block Grants for Prevention and Treatment of Substance Abuse 32500 2,721,374 240,001
93.969 PPHF Geriatric Education Centers UND 432,632 129,548
93.970 Health Professions Recruitment Program for Indians UND 986,868
93.977 Sexually Transmitted Diseases (STD) Prevention and Control 30100 279,682
Grants
93.991 Preventive Health and Health Services Block Grant 30100 442,156 239,935
93.994 Maternal and Child Health Services Block Grant to the States 30100 1,957,340 528,211
Nonmonetary Assistance:
93.268 Immunization Cooperative Agreements 30100 $ 7,399,660 $ 7,362,059
E - 14
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Pass Through Non-State Entity:
93.048 Special Programs for the Aging, Title IV, and Title II, UND University of Southern California 128952893/ PO 50879936 $ 12,255 $
Discretionary Projects
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-1910-02064 755
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-MP-1910-07946 2,992
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-T-1809-06092 1,168
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-T-1910-07942 2,496
93.110 Maternal and Child Health Federal Consolidated Programs 30100 Association of State Public Health 5 U7NMC30388-03-00 1,946 267
Nutritionists
93.110 Maternal and Child Health Federal Consolidated Programs 30100 Colorado School of Public Health FY17.368.017 Amendment 1,812
FY18.368.002_AMD3 PTE
Project No.2-5-M6595
93.243 Substance Abuse and Mental Health Services Projects of NDSU American Society of Addiction Medicine N/A 3,336
Regional and National Significance
93.243 Substance Abuse and Mental Health Services Projects of UND Grand Forks Housing Authority 3 21,837
Regional and National Significance
93.307 Minority Health and Health Disparities Research UND University of Colorado Board of Regents FY20.001.011 / 2-5M7886 26,439
93.421 Strengthening Public Health Systems and Services through 30100 National Association of Chronic Disease 1592020 3,656
National Partnerships to Improve and Protect the Nation’s Directors
Health
93.424 NON-ACA/PPHF—Building Capacity of the Public Health MISU Association of University Centers on N/A 2,150
System to Improve Population Health through National Disabilities
Nonprofit Organizations
93.566 Refugee and Entrant Assistance State/Replacement Designee UND Lutheran Social Services of North Dakota 2020-CMA 3 999
Administered Programs
93.566 Refugee and Entrant Assistance State/Replacement Designee NDSCS Lutheran Social Services of North Dakota 2020-RSS-5 6,942
Administered Programs
93.566 Refugee and Entrant Assistance State/Replacement Designee NDSCS Lutheran Social Services of North 2019-RSS-7C 12,800
Administered Programs Dakota/United Way
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State 11-82905 13,042
University of New York
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State 14-86154 75,417
University of New York
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State 18-21 40,713
University of New York
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State R1148796 92,803
University of New York
E - 15
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State R1196655 323,385
University of New York
93.761 Evidence-Based Falls Prevention Programs Financed Solely NDSU South Dakota State University 3TB507 5,683
by Prevention and Public Health Funds (PPHF)
93.788 Opioid STR UND Curators of the University of Missouri 0099145 / 00070029 225,611
93.788 Opioid STR NDSU Leech Lake Tribe of Ojibwe N/A 7,360
93.788 Opioid STR NDSU South Dakota State University 3TB352 60,019
93.870 Maternal, Infant and Early Childhood Home Visiting Grant NDSU Prevent Child Abuse North Dakota N/A 28,650
93.879 Medical Library Assistance UND The University of Iowa N/A 2,093
93.884 Grants for Primary Care Training and Enhancement UND University of Washington UWSC10279 / BPO 49251 24,456
93.912 Rural Health Care Services Outreach, Rural Health Network UND Amachi Mentoring 1 G25RH329200100 33,410
Development and Small Health Care Provider Quality
Improvement
93.912 Rural Health Care Services Outreach, Rural Health Network UND City County Health District N/A 34,805
Development and Small Health Care Provider Quality
Improvement
Total for Unclustered $ 157,716,715 $ 24,213,567
Unclustered
Direct Programs:
93.U01 MQSA Inspections 30300 HHSF223201710056C $ 58,518 $
93.U02 Medicated Feeds 60200 HHSF223201810106C 96,879
Total for Unclustered $ 155,397 $
Aging Cluster
Direct Programs:
93.044 Special Programs for the Aging, Title III, Part B, Grants for 32500 $ 2,219,190 $ 552,845
Supportive Services and Senior Centers
93.045 Special Programs for the Aging, Title III, Part C, Nutrition 32500 4,523,194
Services
93.053 Nutrition Services Incentive Program 32500 800,693
Total for Aging Cluster $ 7,543,077 $ 552,845
CCDF Cluster
Direct Programs:
93.575 Child Care and Development Block Grant 32500 $ 7,985,334 $ 1,252,567
E - 16
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.596 Child Care Mandatory and Matching Funds of the Child Care 32500 6,433,927
and Development Fund
Total for CCDF Cluster $ 14,419,261 $ 1,252,567
Head Start Cluster
Direct Programs:
93.600 Head Start MASU $ 3,131,518 $
93.600 Head Start 20100 115,132
Nonmonetary Assistance:
93.600 Head Start MASU $ 752,450 $
Total for Head Start Cluster $ 3,999,100 $
Medicaid Cluster
Direct Programs:
93.775 State Medicaid Fraud Control Units 12500 $ 436,041 $
93.777 State Survey and Certification of Health Care Providers and 30100 1,667,456
Suppliers (Title XVIII) Medicare
93.777 State Survey and Certification of Health Care Providers and 32500 1,046,114
Suppliers (Title XVIII) Medicare
93.778 Medical Assistance Program 32500 853,543,450 29,153
Total for Medicaid Cluster $ 856,693,061 $ 29,153
Research & Development Cluster
Direct Programs:
93.103 Food and Drug Administration Research NDSU $ 7,991 $
93.242 Mental Health Research Grants UND 784,102
93.243 Substance Abuse and Mental Health Services Projects of UND 1,856,734 953,681
Regional and National Significance
93.247 Advanced Nursing Education Workforce Grant Program NDSU 291,364 121,817
93.273 Alcohol Research Programs UND 159,198
93.279 Drug Abuse and Addiction Research Programs UND 40,409
93.393 Cancer Cause and Prevention Research UND 2,880
93.395 Cancer Treatment Research UND 151,148
93.396 Cancer Biology Research NDSU 149,190
E - 17
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.837 Cardiovascular Diseases Research NDSU 169,288
93.838 Lung Diseases Research NDSU 376,061 40,499
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research UND 467,524
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research NDSU 769,068 671,529
93.853 Extramural Research Programs in the Neurosciences and UND 256,871
Neurological Disorders
93.855 Allergy and Infectious Diseases Research UND 883,551
93.855 Allergy and Infectious Diseases Research NDSU 211,763 263
93.859 Biomedical Research and Research Training NDSU 2,920,239 111,999
93.859 Biomedical Research and Research Training UND 8,756,152 1,659,574
93.866 Aging Research NDSU 639,489 231,258
93.866 Aging Research UND 445,032
Pass Through Non-State Entity:
93.068 Chronic Diseases: Research, Control, and Prevention UND University of North Carolina at Chapel Hill PO ID Y20DSL0408 $ 2,321 $
93.262 Occupational Safety and Health Program NDSU Colorado State University G-61105-02 1,521
93.262 Occupational Safety and Health Program NDSU University of Nebraska Medical Center 34-5420-2006-209 952
93.262 Occupational Safety and Health Program NDSU University of Nebraska-Omaha 35-5420-2006-208 5,169
93.273 Alcohol Research Programs UND Public Health Institute PA-11-308 106,807
93.273 Alcohol Research Programs NDSU Sanford Research North SR-2019-205 29,316
93.279 Drug Abuse and Addiction Research Programs UND Drexel University PO U0176282 105,182
93.279 Drug Abuse and Addiction Research Programs UND University of Tennessee 20-2050-UND/21-0110-UND 579
93.421 Strengthening Public Health Systems and Services through NDSU National Network of Public Health Institution G1451-AG-0031 12,261
National Partnerships to Improve and Protect the Nation’s
Health
93.505 Affordable Care Act (ACA) Maternal, Infant, and Early NDSU Prevent Child Abuse North Dakota N/A 59,174
Childhood Home Visiting Program
93.648 Child Welfare Research Training or Demonstration UND University of Nebraska 24-0520-0261-006 15,119
93.734 Empowering Older Adults and Adults with Disabilities through UND National Council on Aging, Inc. N/A 3,403
Chronic Disease Self-Management Education Programs –
financed by Prevention and Public Health Funds (PPHF)
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research UND Regents of the University of Michigan 3004429441 148,028
93.853 Extramural Research Programs in the Neurosciences and UND Trinity College NS065957-01 127,428
Neurological Disorders
E - 18
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.855 Allergy and Infectious Diseases Research UND University of Kentucky 3200001545-18-174 41,077
93.855 Allergy and Infectious Diseases Research NDSU University of Pennsylvania 576747 12,386
93.859 Biomedical Research and Research Training UND BBC Entrepreneurial Training & Consulting, ND2018 16,139
LLC
93.859 Biomedical Research and Research Training UND University of Colorado Board of Regents 1554623 / PO 1000757838 26,280
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2005-003 30
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2005-923 2,208
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2005-943 1,711
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2016-101 14,993
93.859 Biomedical Research and Research Training NDSU University of Nebraska Medical Center 34-5250-2016-101 17,089
93.859 Biomedical Research and Research Training NDSU University of Nebraska-Omaha 34-5250-2005-743 15,068
93.865 Child Health and Human Development Extramural Research NDSU University of Texas Medical Branch 20-84471-10 2,404
93.866 Aging Research UND Ohio State University, The 60061309 / PO RF01490312 48,393
93.866 Aging Research UND Ohio State University, The N/A 99,215
93.866 Aging Research UND West Virginia University Corporation 17-471-UND 75,426
93.867 Vision Research UND Barron Associates, Inc. 536-SC01 68,962
93.870 Maternal, Infant and Early Childhood Home Visiting Grant NDSU Prevent Child Abuse North Dakota N/A 27,592
93.945 Assistance Programs for Chronic Disease Prevention and UND Montana Department of Public Health and 14096760050 94,190
Control Human Services
Total for Research & Development Cluster $ 20,518,477 $ 3,790,620
Student Financial Assistance Cluster
Direct Programs:
93.264 Nurse Faculty Loan Program (NFLP) UND $ 119,426 $
93.342 Health Professions Student Loans, Including Primary Care UND 451,096
Loans/Loans for Disadvantaged Students
93.364 Nursing Student Loans MISU 942,722
93.364 Nursing Student Loans NDSU 356,552
93.364 Nursing Student Loans DSU 272,909
93.364 Nursing Student Loans UND 1,492,662
93.925 Scholarships for Health Professions Students from UND 641,276
Disadvantaged Backgrounds
Total for Student Financial Assistance Cluster $ 4,276,643 $
E - 19
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
TANF Cluster
Direct Programs:
93.558 Temporary Assistance for Needy Families 32500 $ 27,173,414 $ 139,101
Total for TANF Cluster $ 27,173,414 $ 139,101
Total For Department Of Health And Human Services $ 1,092,495,145 $ 29,977,853
Department Of Homeland Security
Unclustered
Direct Programs:
97.008 Non-Profit Security Program 54000 $ 22,072 $ 22,072
97.012 Boating Safety Financial Assistance 72000 615,388 11,447
97.023 Community Assistance Program State Support Services 77000 125,482
Element (CAP-SSSE)
97.029 Flood Mitigation Assistance 54000 58,791 57,614
97.032 Crisis Counseling 32500 1,439
97.036 Disaster Grants - Public Assistance (Presidentially Declared 54000 8,030,668 7,904,195
Disasters)
97.036 Disaster Grants - Public Assistance (Presidentially Declared 32500 138,054
Disasters)
97.039 Hazard Mitigation Grant 54000 784,366 480,449
97.041 National Dam Safety Program 77000 173,689
97.042 Emergency Management Performance Grants 54000 3,421,155 1,306,070
97.045 Cooperating Technical Partners 77000 1,778,940
97.047 Pre-Disaster Mitigation 54000 242,431 163,433
97.067 Homeland Security Grant Program 54000 5,326,168 4,326,118
Nonmonetary Assistance:
97.036 Disaster Grants - Public Assistance (Presidentially Declared 30100 $ 433,677 $
Disasters)
Total for Unclustered $ 21,152,320 $ 14,271,398
Total For Department Of Homeland Security $ 21,152,320 $ 14,271,398
E - 20
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Department Of Housing And Urban Development
Unclustered
Direct Programs:
14.171 Manufactured Home Dispute Resolution 60100 $ 5,845 $
14.228 Community Development Block Grants/State's program and 60100 5,250,053 5,032,719
Non-Entitlement Grants in Hawaii
14.231 Emergency Solutions Grant Program 60100 425,290 385,435
14.238 Shelter Plus Care 60100 112,082 112,082
14.239 HOME Investment Partnerships Program 60100 2,242,057 2,065,505
14.401 Fair Housing Assistance Program State and Local 40600 168,400
Total for Unclustered $ 8,203,727 $ 7,595,741
Total For Department Of Housing And Urban Development $ 8,203,727 $ 7,595,741
Department Of Justice
Unclustered
Direct Programs:
16.015 Missing Alzheimer's Disease Patient Assistance Program MISU $ 21,028 $
16.017 Sexual Assault Services Formula Program 30100 372,539 357,315
16.034 Coronavirus Emergency Supplemental Funding Program 12500 10,230
16.320 Services for Trafficking Victims 12500 153,750
16.540 Juvenile Justice and Delinquency Prevention 53000 333,231 333,231
16.543 Missing Children's Assistance 12500 330,666
16.554 National Criminal History Improvement Program (NCHIP) 12500 159,075
16.575 Crime Victim Assistance 53000 160,696
16.576 Crime Victim Compensation 53000 4,606,767 4,515,908
16.585 Drug Court Discretionary Grant Program 53000 38,760
16.588 Violence Against Women Formula Grants 30100 808,641 726,105
16.589 Rural Domestic Violence, Dating Violence, Sexual Assault, and UND 23,501
Stalking Assistance Program
16.596 Justice System Infrastructure Program for Indian Tribes UND 244,559 84,340
16.606 State Criminal Alien Assistance Program 53000 42,580
E - 21
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
16.608 Tribal Justice Systems and Alcohol and Substance Abuse UND 180,583 35,754
16.609 Project Safe Neighborhoods 12500 16,792 16,500
16.710 Public Safety Partnership and Community Policing Grants 12500 725,553
16.734 Special Data Collections and Statistical Studies 12500 69,599
16.738 Edward Byrne Memorial Justice Assistance Grant Program 12500 455,635 184,470
16.741 DNA Backlog Reduction Program 12500 294,045
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program 12500 245,468
16.750 Support for Adam Walsh Act Implementation Grant Program 12500 82,275
16.813 NICS Act Record Improvement Program 12500 179,485
Pass Through Non-State Entity:
16.029 Office on Violence Against Women Special Projects UND Tribal Law and Policy Institute N/A $ 50,530 $
16.582 Crime Victim Assistance/Discretionary Grants UND Fox Valley Technical College D2019012073 54,115
16.608 Tribal Justice Systems and Alcohol and Substance Abuse UND Fox Valley Technical College D2019001020 8,737
16.608 Tribal Justice Systems and Alcohol and Substance Abuse UND Fox Valley Technical College D2019002019 39,146
16.726 Juvenile Mentoring Program NDSU National 4-H Council 2018-JU-FX-0005 46,081
16.751 Edward Byrne Memorial Competitive Grant Program UND Fox Valley Technical College D2016010002 9,999
16.815 Tribal Civil and Criminal Legal Assistance Grants, Training and UND American Probation and Parole Association 20-A4-085-2387 49,510
Technical Assistance
Total for Unclustered $ 9,813,576 $ 6,253,623
Unclustered
Direct Programs:
16.U01 Federal Bureau of Prisons (Juvenile Inmate Housing) 53000 IGA-815-11 $ 73,598 $
Total for Unclustered $ 73,598 $
Research & Development Cluster
Pass Through Non-State Entity:
16.608 Tribal Justice Systems and Alcohol and Substance Abuse UND National Judicial College, The NJC-2019001 $ 20,484 $
Total for Research & Development Cluster $ 20,484 $
Total For Department Of Justice $ 9,907,658 $ 6,253,623
E - 22
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Department Of Labor
Unclustered
Direct Programs:
17.235 Senior Community Service Employment Program 32500 $ 430,399 $ 429,762
17.504 Consultation Agreements BSC 522,363
17.600 Mine Health and Safety Grants 27000 63,757 63,757
Total for Unclustered $ 1,016,519 $ 493,519
Total For Department Of Labor $ 1,016,519 $ 493,519
Department Of State
Unclustered
Pass Through Non-State Entity:
19.402 Professional and Cultural Exchange Programs - International MISU Global Ties U.S. S-ECAGD-18-CA-1018 $ 620 $
Visitor Leadership Program
19.402 Professional and Cultural Exchange Programs - International MISU Global Ties U.S. S-ECAGD-19-CA-0041 3,394
Visitor Leadership Program
Total for Unclustered $ 4,014 $
Total For Department Of State $ 4,014 $
Department Of The Interior
Unclustered
Direct Programs:
15.224 Cultural and Paleontological Resources Management MISU $ 3,900 $
15.227 Distribution of Receipts to State and Local Governments 12000 10,867 10,867
15.250 Regulation of Surface Coal Mining and Surface Effects of 40800 938,464
Underground Coal Mining
15.252 Abandoned Mine Land Reclamation (AMLR) 40800 2,499,307
15.427 Federal Oil and Gas Royalty Management State and Tribal 11700 643,106
Coordination
15.433 Flood Control Act Lands 12000 36,474,215 36,474,215
15.436 Late Disbursement Interest 12000 117,084 72,972
15.437 Minerals Leasing Act 12000 56,339,379 29,512,894
15.518 Garrison Diversion Unit 72000 876,300
E - 23
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
15.608 Fish and Wildlife Management Assistance 72000 64,536
15.615 Cooperative Endangered Species Conservation Fund 72000 45,361
15.615 Cooperative Endangered Species Conservation Fund 75000 5,856
15.634 State Wildlife Grants Misub 33,636
15.634 State Wildlife Grants 72000 547,131 32,799
15.637 Migratory Bird Joint Ventures 72000 16,020 16,020
15.657 Endagered Species Recovery Implementation 72000 16,523
15.808 U.S. Geological Survey Research and Data Collection 77000 24,398
15.904 Historic Preservation Fund Grants-In-Aid 70100 638,078 139,290
15.916 Outdoor Recreation Acquisition, Development and Planning 75000 509,454 507,204
15.929 Save America's Treasures 70100 117
Pass Through Non-State Entity:
15.518 Garrison Diversion Unit 77000 Garrison Diversion Conservancy District 6-FC-60-00210 $ 13,389,624 $
15.815 National Land Remote Sensing Education Outreach and UND AmericaView AV18-ND-01 18,738
Research
15.939 Heritage Partnership NDSU Northern Plains Heritage Foundation P10AC00310 6
Total for Unclustered $ 113,212,100 $ 66,766,261
Fish and Wildlife Cluster
Direct Programs:
15.605 Sport Fish Restoration 72000 $ 4,427,420 $ 636,141
15.611 Wildlife Restoration and Basic Hunter Education 72000 8,441,017 434,530
15.626 Enhanced Hunter Education and Safety 72000 96,553 96,553
Pass Through Non-State Entity:
15.605 Sport Fish Restoration NDSU South Dakota Department of Game, Fish 20SC06W011 $ 27,093 $
and Parks
Total for Fish and Wildlife Cluster $ 12,992,083 $ 1,167,224
Research & Development Cluster
Direct Programs:
15.608 Fish and Wildlife Management Assistance NDSU $ 477 $
15.678 Cooperative Ecosystem Studies Units NDSU 54,077
E - 24
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
15.805 Assistance to State Water Resources Research Institutes NDSU 80,588
15.808 U.S. Geological Survey Research and Data Collection NDSU 83,900
15.945 Cooperative Research and Training Programs – Resources of UND 10,760
the National Park System
15.945 Cooperative Research and Training Programs – Resources of NDSU 112,078
the National Park System
Total for Research & Development Cluster $ 341,880 $
Total For Department Of The Interior $ 126,546,063 $ 67,933,485
Department Of The Treasury
Unclustered
Direct Programs:
21.019 Coronavirus Relief Fund 40500 $ 1,944 $
21.019 Coronavirus Relief Fund 67000 1,000
21.019 Coronavirus Relief Fund 60200 267,781 267,781
21.019 Coronavirus Relief Fund 31300 199,819
21.019 Coronavirus Relief Fund 50400 38,770
21.019 Coronavirus Relief Fund 32500 19,379,014
21.019 Coronavirus Relief Fund 47500 149,079
21.019 Coronavirus Relief Fund 12700 13,760
21.019 Coronavirus Relief Fund BSC 186,833
21.019 Coronavirus Relief Fund UND 222,485
21.019 Coronavirus Relief Fund LRSC 98,455
21.019 Coronavirus Relief Fund MASU 23,197
21.019 Coronavirus Relief Fund MISU 54,098
21.019 Coronavirus Relief Fund MISUB 26,881
21.019 Coronavirus Relief Fund NDSCS 13,867
21.019 Coronavirus Relief Fund DSU 2,008
21.019 Coronavirus Relief Fund 10100 18,083
21.019 Coronavirus Relief Fund VCSU 33,972
21.019 Coronavirus Relief Fund NDSU 7,535
Total for Unclustered $ 20,738,581 $ 267,781
E - 25
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Total For Department Of The Treasury $ 20,738,581 $ 267,781
Department Of Transportation
Unclustered
Direct Programs:
20.200 Highway Research and Development Program 80100 $ 29,701 $
20.215 Highway Training and Education 80100 93,086
20.240 Fuel Tax Evasion-Intergovernmental Enforcement Effort 12700 17,757
20.301 Railroad Safety 40800 6,217
20.505 Metropolitan Transportation Planning and State and Non- 80100 335,214 335,214
Metropolitan Planning and Research
20.509 Formula Grants for Rural Areas and Tribal Transit Program 80100 7,977,238 7,860,404
20.700 Pipeline Safety Program State Base Grant 40800 190,085
20.703 Interagency Hazardous Materials Public Sector Training and 54000 414,254 83,098
Planning Grants
20.721 PHMSA Pipeline Safety Program One Call Grant 40800 25,578
Total for Unclustered $ 9,089,130 $ 8,278,716
Unclustered
Direct Programs:
20.U02 Accelerated Safety Activity Program 80100 DTNH22-17-H-00142 $ 17,649 $
20.U03 Air Force Junior Reserve Officer Training Corps (AFJROTC) UND FA3300-19-H-0013 139,697
Pass Through Non-State Entity:
20.U01 5010 Inspections 41200 GCR Inc. N/A $ 18,850 $
Total for Unclustered $ 176,196 $
Federal Motor Carrier Safety Assistance Cluster
Direct Programs:
20.218 Motor Carrier Safety Assistance 50400 $ 4,374,713 $
Total for Federal Motor Carrier Safety Assistance Cluster $ 4,374,713 $
Federal Transit Cluster
Direct Programs:
20.500 Federal Transit Capital Investment Grants 80100 $ 84,059 $ 84,059
E - 26
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
20.526 Buses and Bus Facilities Formula, Competitive, and Low or No 80100 5,315,357 5,315,357
Emissions Programs
Total for Federal Transit Cluster $ 5,399,416 $ 5,399,416
Highway Planning and Construction Cluster
Direct Programs:
20.205 Highway Planning and Construction 80100 $ 313,536,418 $ 3,236,965
20.219 Recreational Trails Program 80100 774
20.219 Recreational Trails Program 75000 890,940 405,879
Pass Through Non-State Entity:
20.205 Highway Planning and Construction NDSU Bismarck-Mandan Metropolitan Planning 38151860 Bis-Man $ 18,593 $
Organization
20.205 Highway Planning and Construction NDSU Fargo-Moorhead Metropolitan Council of 38151860- FM COG 25,104
Governments
20.205 Highway Planning and Construction NDSU Grand Forks-East Grand Forks Metropolitan 38151860- GF/EGF MPO 37,913
Council of Governments
20.205 Highway Planning and Construction NDSU Minnesota Department of Transportation 1003323 Work Order No. 6 80,530
Total for Highway Planning and Construction Cluster $ 314,590,272 $ 3,642,844
Highway Safety Cluster
Direct Programs:
20.600 State and Community Highway Safety 80100 $ 1,656,469 $ 334,024
20.616 National Priority Safety Programs 80100 1,823,409 475,150
Total for Highway Safety Cluster $ 3,479,878 $ 809,174
Research & Development Cluster
Direct Programs:
20.232 Commercial Driver's License Program Implementation Grant NDSU $ 38,703 $
20.237 Motor Carrier Safety Assistance High Priority Activities Grants NDSU 123,485
and Cooperative Agreements
20.701 University Transportation Centers Program NDSU 1,854,773 1,414,383
20.724 Pipeline Safety Research Competitive Academic Agreement NDSU 342,098 56,943
Program (CAAP)
20.RD A18_A11L.UAS.22-Small UAS Detect and Avoid Requirements UND 15-C-UAS-UND-011 157,951
20.RD A25 - Develop Risk-Based Training and Standards for Waiver UND 15-C-UAS-UND-019 13,278
Review and Insurance
E - 27
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
20.RD A27: Establish Risk-Based Thresholds for Approvals Needed UND 15-C-UAS-UND-015 24,915
to certify UAS for Safe Operation
20.RD Integrating Expanded and Nonsegregated UAS Operations UND 15-C-UAS-UND-014 50,897 10,673
20.RD UAS Parameters, Exceedances, Recording Rates for ASIAS UND 15-C-UAS-UND-012 69,532
20.RD UAS Safety Case Development, Process Improvement, and Da UND 15-C-UAS-UND-021 3,534
20.RD UAS Test Data Collection and Analysis UND 15-C-UAS-UND-010 171,348 84,750
Pass Through Non-State Entity:
20.108 Aviation Research Grants UND The MITRE Corporation 119947 TaskOrder 3-130354 $ 175,534 $
20.200 Highway Research and Development Program NDSU The National Academies NCHRP-219 7,332
20.200 Highway Research and Development Program NDSU WSP Global Inc. WSP #182618G 11,791
20.701 University Transportation Centers Program NDSU Montana State University G136-14-W4660 34,415
20.701 University Transportation Centers Program NDSU Montana State University G226-17-W6460 645,660
20.724 Pipeline Safety Research Competitive Academic Agreement NDSU Stevens Institute of Technology 2103007-01 5,655
Program (CAAP)
20.RD Seat Belt Use in South Dakota NDSU South Dakota Department of Public Safety N/A 13,037
20.RD Seat Belt, Cell Phone and Ride Service Surveys to Enhance NDSU South Dakota Department of Public Safety N/A 11,531
Total for Research & Development Cluster $ 3,755,469 $ 1,566,749
Transit Services Programs Cluster
Direct Programs:
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities 80100 $ 520,426 $ 520,426
Total for Transit Services Programs Cluster $ 520,426 $ 520,426
Total For Department Of Transportation $ 341,385,500 $ 20,217,325
Department Of Veterans Affairs
Unclustered
Direct Programs:
64.014 Veterans State Domiciliary Care 31300 $ 901,511 $
64.015 Veterans State Nursing Home Care 31300 1,726,077
64.035 Veterans Transportation Program 32100 590,070 546,424
Total for Unclustered $ 3,217,658 $ 546,424
E - 28
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Unclustered
Direct Programs:
64.U01 State Approving Agency 32100 V101 (223C) P-5745 $ 118,813 $
64.U02 VA - Residents Rotations UND N/A 391,822
Total for Unclustered $ 510,635 $
Total For Department Of Veterans Affairs $ 3,728,293 $ 546,424
Elections Assistance Commission
Unclustered
Direct Programs:
90.404 2018 HAVA Election Security Grants 10800 $ 458,742 $
Total for Unclustered $ 458,742 $
Total For Elections Assistance Commission $ 458,742 $
Environmental Protection Agency
Unclustered
Direct Programs:
66.034 Surveys, Studies, Research, Investigations, Demonstrations, 30300 $ 143,736 $
and Special Purpose Activities Relating to the Clean Air Act
66.040 State Clean Diesel Grant Program 30300 225,028 225,028
66.419 Water Pollution Control State, Interstate, and Tribal Program 30300 197,197 2,921
Support
66.433 State Underground Water Source Protection 40500 155,092
66.444 Lead Testing in School and Child Care Program Drinking 30300 8,204
Water (SDWA 1464(d))
66.454 Water Quality Management Planning 30300 91,661 20,224
66.460 Nonpoint Source Implementation Grants 30300 3,165,213 1,899,996
66.605 Performance Partnership Grants NDSU 13,669
66.605 Performance Partnership Grants 30300 4,290,961 40,382
66.608 Environmental Information Exchange Network Grant Program 30300 204,614
and Related Assistance
66.700 Consolidated Pesticide Enforcement Cooperative Agreements NDSU 51,001
66.700 Consolidated Pesticide Enforcement Cooperative Agreements 60200 561,877
E - 29
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
66.804 Underground Storage Tank (UST) Prevention, Detection, and 30300 247,763
Compliance Program
66.805 Leaking Underground Storage Tank Trust Fund Corrective 30300 320,227
Action Program
66.818 Brownfields Assessment and Cleanup Cooperative Agreements 30300 225,316
Pass Through Non-State Entity:
66.716 Research, Development, Monitoring, Public Education, NDSU eXtension Foundation X8-83698001 $ 18,175 $
Outreach, Training, Demonstrations, and Studies
Total for Unclustered $ 9,919,734 $ 2,188,551
Unclustered
Direct Programs:
66.U01 Water Sample Collection VCSU W912ES-16-P-0058 $ 7,007 $
Total for Unclustered $ 7,007 $
Drinking Water State Revolving Fund Cluster
Direct Programs:
66.468 Capitalization Grants for Drinking Water State Revolving Funds 30300 $ 978,588 $
Total for Drinking Water State Revolving Fund Cluster $ 978,588 $
Research & Development Cluster
Direct Programs:
66.461 Regional Wetland Program Development Grants NDSU $ 98,198 $
66.509 Science To Achieve Results (STAR) Research Program UND 52,664
Total for Research & Development Cluster $ 150,862 $
Total For Environmental Protection Agency $ 11,056,191 $ 2,188,551
Equal Employment Opportunity Commission
Unclustered
Direct Programs:
30.002 Employment Discrimination - State and Local Fair Employment 40600 $ 143,040 $
Practices Agency Contracts
Total for Unclustered $ 143,040 $
Total For Equal Employment Opportunity Commission $ 143,040 $
E - 30
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Executive Office of the President
Unclustered
Direct Programs:
95.001 High Intensity Drug Trafficking Areas Program 12500 $ 679,827 $ 291,742
Total for Unclustered $ 679,827 $ 291,742
Total For Executive Office of the President $ 679,827 $ 291,742
General Services Administration
Unclustered
Nonmonetary Assistance:
39.003 Donation of Federal Surplus Personal Property 11000 $ 1,815,794 $
Total for Unclustered $ 1,815,794 $
Total For General Services Administration $ 1,815,794 $
Institute of Museum and Library Services
Unclustered
Direct Programs:
45.310 Grants to States 25000 $ 920,089 $
Total for Unclustered $ 920,089 $
Total For Institute of Museum and Library Services $ 920,089 $
National Aeronautics and Space Administration
Unclustered
Direct Programs:
43.008 Office of Stem Engagement (OSTEM) UND $ 1,187,535 $ 30,290
43.012 Space Technology 60100 1,632,092
Total for Unclustered $ 2,819,627 $ 30,290
Research & Development Cluster
Direct Programs:
43.001 Science UND $ 426,489 $ 5,500
Pass Through Non-State Entity:
43.001 Science UND Planetary Science Institute 1345 $ 934 $
E - 31
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
43.001 Science NDSU University of New Hampshire 15-024 19,953
43.RD Chip-Based ADS-B for High Density, Low Altitude UAV NDSU University Of Washington UWSC11328 11,756
Operations
Total for Research & Development Cluster $ 459,132 $ 5,500
Total For National Aeronautics and Space Administration $ 3,278,759 $ 35,790
National Endowment for the Arts
Unclustered
Direct Programs:
45.025 Promotion of the Arts Partnership Agreements 70900 $ 1,114,443 $ 928,082
Pass Through Non-State Entity:
45.024 Promotion of the Arts Grants to Organizations and Individuals DSU Arts Midwest 1844334-52-C-18 $ 18,597 $
Total for Unclustered $ 1,133,040 $ 928,082
Total For National Endowment for the Arts $ 1,133,040 $ 928,082
National Endowment for the Humanities
Unclustered
Direct Programs:
45.149 Promotion of the Humanities Division of Preservation and 70100 $ 23,214 $
Access
Pass Through Non-State Entity:
45.129 Promotion of the Humanities Federal/State Partnership BSC Humanities North Dakota 19508 $ 9,399 $
Total for Unclustered $ 32,613 $
Total For National Endowment for the Humanities $ 32,613 $
National Science Foundation
Unclustered
Direct Programs:
47.076 Education and Human Resources NDSCS $ 122,296 $
47.U01 IPA - Intergovernmental Personal Act NDSU CNS-1650752 172,640
Pass Through Non-State Entity:
47.070 Computer and Information Science and Engineering UND University of Illinois 2015-07710-04 $ 31,765 $
E - 32
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
47.076 Education and Human Resources NDSU Salish Kootenai College NDSU-18-2 4,900
Total for Unclustered $ 331,601 $
Research & Development Cluster
Direct Programs:
47.041 Engineering NDSU $ 326,979 $ 3,139
47.041 Engineering UND 92,233
47.049 Mathematical and Physical Sciences NDSU 501,737
47.049 Mathematical and Physical Sciences UND 265,990
47.050 Geosciences NDSU 84,292
47.050 Geosciences UND 423,912 14,850
47.070 Computer and Information Science and Engineering NDSU 462,111
47.070 Computer and Information Science and Engineering UND 680,102 358,259
47.074 Biological Sciences UND 836,682
47.074 Biological Sciences NDSU 881,165
47.075 Social, Behavioral, and Economic Sciences NDSU 84,931
47.075 Social, Behavioral, and Economic Sciences UND 91,272
47.076 Education and Human Resources NDSU 1,372,935 34,105
47.076 Education and Human Resources WSC 80,200
47.076 Education and Human Resources UND 401,762
47.079 Office of International Science and Engineering UND 26,862
47.083 Integrative Activities NDSU 2,979,594
Pass Through Non-State Entity:
47.041 Engineering NDSU Syracuse University 28250-04301-S22 $ 3,130 $
47.041 Engineering NDSU University of Minnesota A005007501 48,257
47.041 Engineering UND University of Utah, The 10040267/58502300 50,249
47.049 Mathematical and Physical Sciences NDSU California State University, Fullerton S-5741-NDSU-02 10,882
47.070 Computer and Information Science and Engineering UND University of Illinois 067846-17002 3,167
47.070 Computer and Information Science and Engineering UND University of Illinois 096085-17571 1,954
47.070 Computer and Information Science and Engineering NDSU University of South Alabama A19-0025-S001 61,723
E - 33
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
47.074 Biological Sciences NDSU Virginia Tech 480146-19953 80,406
47.075 Social, Behavioral, and Economic Sciences NDSU Michigan State University RC108528NDSU 11,403
47.075 Social, Behavioral, and Economic Sciences NDSU University of Minnesota A007306801 34,037
47.076 Education and Human Resources NDSU Clemson University 1882-206-2011602 3,135 2,162
47.076 Education and Human Resources NDSU Missouri University of Science &Technology 0052875 4,548
47.079 Office of International Science and Engineering NDSU University of South Alabama A19-0039-S001 4,989
47.083 Integrative Activities NDSU Bates College S19-004 132,314
Total for Research & Development Cluster $ 10,042,953 $ 412,515
Total For National Science Foundation $ 10,374,554 $ 412,515
Nuclear Regulatory Commission
Unclustered
Direct Programs:
77.008 U.S. Nuclear Regulatory Commission Scholarship and BSC $ 16,430 $
Fellowship Program
Total for Unclustered $ 16,430 $
Total For Nuclear Regulatory Commission $ 16,430 $
Small Business Administration
Unclustered
Direct Programs:
59.037 Small Business Development Centers UND $ 797,986 $ 107,284
59.044 Veterans Outreach Program UND 261,948
Total for Unclustered $ 1,059,934 $ 107,284
Total For Small Business Administration $ 1,059,934 $ 107,284
Social Security Administration
Unclustered
Direct Programs:
96.009 Social Security State Grants for Work Incentives Assistance to 36000 $ 149,651 $
Disabled Beneficiaries
Total for Unclustered $ 149,651 $
E - 34
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Disability Insurance/SSI Cluster
Direct Programs:
96.001 Social Security Disability Insurance 32500 $ 3,286,776 $
Total for Disability Insurance/SSI Cluster $ 3,286,776 $
Total For Social Security Administration $ 3,436,427 $
U.S. Department Of Agriculture
Unclustered
Direct Programs:
10.001 Agricultural Research Basic and Applied Research NDSU $ 230 $
10.025 Plant and Animal Disease, Pest Control, and Animal Care 60200 409,461
10.025 Plant and Animal Disease, Pest Control, and Animal Care NDSU 234,970
10.086 Aquaculture Grants Program (AGP) MISUB 31
10.153 Market News 60200 10,500
10.162 Inspection Grading and Standardization 60200 1,033
10.163 Market Protection and Promotion 60200 10,800
10.168 Farmers Market Promotion Program MISUB 95,378
10.170 Specialty Crop Block Grant Program - Farm Bill 60200 2,456,214 452,533
10.171 Organic Certification Cost Share Programs 60200 105,000 99,359
10.178 Trade Mitigation Program Eligible Recipient Agency 20100 108,949
Operational Funds
10.310 Agriculture and Food Research Initiative (AFRI) BSC 12,599
10.310 Agriculture and Food Research Initiative (AFRI) MISUB 1,702
10.310 Agriculture and Food Research Initiative (AFRI) NDSU 28,337
10.326 Capacity Building for Non-Land Grant Colleges of Agriculture DSU 4,000
(NLGCA)
10.329 Crop Protection and Pest Management Competitive Grants NDSU 180,581
Program
10.351 Rural Business Development Grant MISU 21,000
10.351 Rural Business Development Grant BSC 69,546
10.435 State Mediation Grants 60200 62,850
10.475 Cooperative Agreements with States for Intrastate Meat and 60200 476,144
Poultry Inspection
E - 35
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.477 Meat, Poultry, and Egg Products Inspection 60200 94,246
10.500 Cooperative Extension Service NDSU 93,249
10.534 CACFP Meal Service Training Grants 20100 33,447 12,470
10.541 Child Nutrition-Technology Innovation Grant 20100 18,175
10.557 WIC Special Supplemental Nutrition Program for Women, 30100 9,919,296 3,464,202
Infants, and Children
10.558 Child and Adult Care Food Program 20100 8,725,329 8,304,413
10.560 State Administrative Expenses for Child Nutrition 20100 1,751,277 583,562
10.567 Food Distribution Program on Indian Reservations 20100 1,444,808 908,893
10.578 WIC Grants To States (WGS) 30100 863,913 11,699
10.579 Child Nutrition Discretionary Grants Limited Availability 20100 49,767 48,429
10.582 Fresh Fruit and Vegetable Program 20100 1,852,421 1,748,182
10.664 Cooperative Forestry Assistance NDSU 1,380,372 409,297
10.680 Forest Health Protection 60200 59,586 53,750
10.691 Good Neighbor Authority NDSU 71,749
10.697 State & Private Forestry Hazardous Fuel Reduction Program NDSU 263,696
10.773 Rural Business Opportunity Grants MISUB 31,194
10.855 Distance Learning and Telemedicine Loans and Grants BSC 247,496
10.902 Soil and Water Conservation NDSU 115,881
10.902 Soil and Water Conservation MISUB 37,504
10.912 Environmental Quality Incentives Program 60200 95,174 47,283
10.950 Agricultural Statistics Reports NDSU 20,000
Nonmonetary Assistance:
10.475 Cooperative Agreements with States for Intrastate Meat and 60200 $ 6,194 $
Poultry Inspection
10.567 Food Distribution Program on Indian Reservations 20100 4,337,764 4,337,764
Pass Through Non-State Entity:
10.215 Sustainable Agriculture Research and Education NDSCS Northcentral Technical College 201910-08-02 $ 7,334 $
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H004991239 5,575
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H005722933 18,814
E - 36
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H006607438 59,993
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007179302 37,659
10.303 Integrated Programs NDSU South Dakota State University 3TB373 6,601
10.304 Homeland Security Agricultural NDSU Kansas State University S17046 26,977
10.310 Agriculture and Food Research Initiative (AFRI) NDSU North Carolina State University 2015-0097-12 24,111
10.328 National Food Safety Training, Education, Extension, NDSU Iowa State University 4163031F 1,316
Outreach, and Technical Assistance Competitive Grants
Program
10.329 Crop Protection and Pest Management Competitive Grants NDSU Michigan State University RC108974F 16,359
Program
10.500 Cooperative Extension Service NDSU Auburn University 18-CHS-205205-NDSU 54,650 16,956
10.500 Cooperative Extension Service NDSU Auburn University 20HDFS-205212-NDSU 39,243 15,497
10.500 Cooperative Extension Service NDSU Kansas State University A00-0983-S046 12,483
10.500 Cooperative Extension Service NDSU Kansas State University S19103 14,180
10.500 Cooperative Extension Service NDSU South Dakota State University 3TB319 25,049
10.500 Cooperative Extension Service NDSU South Dakota State University 3TG521 35,375
10.500 Cooperative Extension Service NDSU South Dakota State University N/A 22,591
10.511 Smith-Lever Funding (Various Programs) NDSU University of Minnesota CPS # 0001810051 343,341
10.525 Farm and Ranch Stress Assistance Network Competitive NDSU Iowa State University 021546F 3,720
Grants Program
10.912 Environmental Quality Incentives Program NDSU University of Wisconsin Madison PO#0000000134 10,556
Total for Unclustered $ 36,567,790 $ 20,514,289
Unclustered
Direct Programs:
10.U01 Curation of Artifacts 70100 18-CS-11011800-21 & 18-PA- $ 4,116 $
11011800-21
Total for Unclustered $ 4,116 $
Child Nutrition Cluster
Direct Programs:
10.553 School Breakfast Program 20100 $ 4,929,984 $ 4,881,045
10.555 National School Lunch Program 20100 17,389,334 17,308,478
10.556 Special Milk Program for Children 20100 23,401 23,401
E - 37
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.559 Summer Food Service Program for Children 20100 12,392,777 12,300,613
Nonmonetary Assistance:
10.555 National School Lunch Program 20100 $ 5,431,933 $ 5,431,933
10.559 Summer Food Service Program for Children 20100 6,400 6,400
Pass Through Non-State Entity:
10.555 National School Lunch Program 25200 North Dakota Department of Public N/A $ 7,399 $
Instruction
Total for Child Nutrition Cluster $ 40,181,228 $ 39,951,870
Food Distribution Cluster
Direct Programs:
10.565 Commodity Supplemental Food Program 20100 $ 112,292 $ 57,581
10.568 Emergency Food Assistance Program (Administrative Costs) 20100 208,891 105,559
Nonmonetary Assistance:
10.565 Commodity Supplemental Food Program 20100 $ 445,940 $ 445,940
10.569 Emergency Food Assistance Program (Food Commodities) 20100 3,652,213 3,652,213
Total for Food Distribution Cluster $ 4,419,336 $ 4,261,293
Forest Service Schools and Roads Cluster
Direct Programs:
10.665 Schools and Roads - Grants to States 12000 $ 365 $ 365
10.U02 USDA Forest Service Cost Share Challenge VCSU 16-CS-11011800-016 19,614
10.U03 USDA Forest Service Cost Share Challenge VCSU 17-CS-11011800-017 2,805
Total for Forest Service Schools and Roads Cluster $ 22,784 $ 365
Research & Development Cluster
Direct Programs:
10.001 Agricultural Research Basic and Applied Research NDSU $ 3,340,980 $
10.001 Agricultural Research Basic and Applied Research UND 1,785,117
10.025 Plant and Animal Disease, Pest Control, and Animal Care NDSU 60,006
10.028 Wildlife Services NDSU 94,299
10.167 Transportation Services NDSU 100,872
10.200 Grants for Agricultural Research, Special Research Grants NDSU 255,769 28,983
E - 38
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.202 Cooperative Forestry Research NDSU 161,104
10.203 Payments to Agricultural Experiment Stations Under the Hatch NDSU 2,412,520
Act
10.207 Animal Health and Disease Research NDSU 38,455
10.310 Agriculture and Food Research Initiative (AFRI) NDSU 1,401,751 247,494
10.310 Agriculture and Food Research Initiative (AFRI) UND 96,576
10.330 Alfalfa and Forage Research Program NDSU 30,670 13,803
10.500 Cooperative Extension Service NDSU 3,134,080
10.664 Cooperative Forestry Assistance UND 3,072
10.664 Cooperative Forestry Assistance NDSU 90,465
10.912 Environmental Quality Incentives Program NDSU 210,793 74,543
10.924 Conservation Stewardship Program NDSU 13,328
10.932 Regional Conservation Partnership Program UND 14,844
10.RD Acquisition of Goods and Services NDSU 58-3060-9-029 62,285
10.RD Incorporating a Climate-based Adaptation Approach NDSU 17-JV-11272138-022 7,034
Pass Through Non-State Entity:
10.001 Agricultural Research Basic and Applied Research NDSU University of Nebraska-Lincoln 25-6235-0275-002 $ 1,500 $
10.025 Plant and Animal Disease, Pest Control, and Animal Care NDSU Colorado State University G-92892-01 25,424
10.163 Market Protection and Promotion NDSU American Sheep Industry Association N/A 3,025
10.170 Specialty Crop Block Grant Program - Farm Bill NDSU National Sunflower Association 18-250 77,022
10.170 Specialty Crop Block Grant Program - Farm Bill NDSU National Sunflower Association 19-422 2,124
10.170 Specialty Crop Block Grant Program - Farm Bill NDSU University of Minnesota H007080501 19,914
10.170 Specialty Crop Block Grant Program - Farm Bill NDSU USA Dry Pea & Lentil Council N/A 18,212
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University PO 388158 37,090
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University PO513439 9,515
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University RC106511C 78,421
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University RC110838NDSU 4,237
10.215 Sustainable Agriculture Research and Education NDSU South Dakota State University 3TB473 2,159
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H005722909 47,928
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007179324 38,983
E - 39
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007179351 4,989
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007813915 23,105
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007813918 5,304
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007813925 66,551
10.227 1994 Institutions Research Program NDSU United Tribes Technical College N/A 22,814
10.303 Integrated Programs NDSU Michigan State University RC108938NDSU 13,519 4,390
10.303 Integrated Programs NDSU University of Wisconsin Madison 855K326 1,632
10.307 Organic Agriculture Research and Extension Initiative NDSU Montana State University G193-19-W7408 15,864
10.309 Specialty Crop Research Initiative NDSU Colorado State University G-01363-02 22,505
10.309 Specialty Crop Research Initiative NDSU Cornell University 73999-10419 23,127
10.309 Specialty Crop Research Initiative NDSU Montana State University G102-20-W7553 189,182
10.309 Specialty Crop Research Initiative NDSU University of Minnesota H007082504 261,273
10.310 Agriculture and Food Research Initiative (AFRI) NDSU Kansas State University S19134 27,816
10.310 Agriculture and Food Research Initiative (AFRI) NDSU Purdue University F9002711902004 87,095
10.310 Agriculture and Food Research Initiative (AFRI) NDSU South Dakota State University 3TB455 14,650
10.310 Agriculture and Food Research Initiative (AFRI) NDSU South Dakota State University 3TB821 3,682
10.310 Agriculture and Food Research Initiative (AFRI) NDSU University of Connecticut 174365 2,857
10.320 Sun Grant Program NDSU South Dakota State University 3TK640 395
10.326 Capacity Building for Non-Land Grant Colleges of Agriculture NDSU University of Wisconsin - River Falls 2018-1004 29,966
(NLGCA)
10.329 Crop Protection and Pest Management Competitive Grants NDSU Michigan State University RC108974G 24,476
Program
10.902 Soil and Water Conservation NDSU Red River Basin Commission N/A 3,887
10.903 Soil Survey NDSU Purdue University 8000083094-AG 2,399
10.924 Conservation Stewardship Program NDSU Turtle Mountain Community College NR186633XXXXG006 13,234
Total for Research & Development Cluster $ 14,539,896 $ 369,213
SNAP Cluster
Direct Programs:
10.551 Supplemental Nutrition Assistance Program 32500 $ 81,346,749 $
10.561 State Administrative Matching Grants for the Supplemental 32500 13,162,856 269,801
Nutrition Assistance Program
Total for SNAP Cluster $ 94,509,605 $ 269,801
E - 40
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2020
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Total For U.S. Department Of Agriculture $ 190,244,755 $ 65,366,831
United States Agency For International Development
Research & Development Cluster
Pass Through Non-State Entity:
98.001 USAID Foreign Assistance for Programs Overseas NDSU Michigan State University RC108887 - NDSU $ 35,514 $ 22,720
98.001 USAID Foreign Assistance for Programs Overseas NDSU Pennsylvania State University 4932-NDSU-AID-0077 123
98.001 USAID Foreign Assistance for Programs Overseas NDSU The National Academies 200008308 86,500
Total for Research & Development Cluster $ 122,137 $ 22,720
Total For United States Agency For International Development $ 122,137 $ 22,720
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,293,030,654 $ 324,653,003
E - 41
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Corporation For National And Community Service
Unclustered
Direct Programs:
94.003 State Commissions 60100 $ 55,160 $
94.006 AmeriCorps 60100 274,645 274,145
94.009 Training and Technical Assistance 60100 50,196
Total for Unclustered $ 380,001 $ 274,145
Foster Grandparent/Senior Companion Cluster
Direct Programs:
94.011 Foster Grandparent Program 32500 $ 9,047 $
Total for Foster Grandparent/Senior Companion Cluster $ 9,047 $
Total For Corporation For National And Community Service $ 389,048 $ 274,145
Department Of Commerce
Unclustered
Direct Programs:
11.303 Economic Development Technical Assistance UND $ 43,807 $
11.549 State and Local Implementation Grant Program 11200 38,379
Total for Unclustered $ 82,186 $
Unclustered
Pass Through Non-State Entity:
11.U01 National Mesonet Program Prime Contract NDSU Synoptic Data Corp. S2017-0124 $ 320,139 $
Total for Unclustered $ 320,139 $
Research & Development Cluster
Direct Programs:
11.609 Measurement and Engineering Research and Standards NDSU $ 14,444 $
Total for Research & Development Cluster $ 14,444 $
Total For Department Of Commerce $ 416,769 $
E - 42
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Department Of Defense
Unclustered
Direct Programs:
12.002 Procurement Technical Assistance For Business Firms UND $ 127,338 $
12.112 Payments to States in Lieu of Real Estate Taxes 12000 107,348 107,348
12.401 National Guard Military Operations and Maintenance (O&M) 54000 18,933,774
Projects
12.750 Uniformed Services University Medical Research Projects NDSU 109,796 100,761
12.903 GenCyber Grants Program NDSU 15,099
Nonmonetary Assistance:
12.401 National Guard Military Operations and Maintenance (O&M) 54000 $ 227,189 $
Projects
Pass Through Non-State Entity:
12.903 GenCyber Grants Program NDSU Dakota State University DSU-NDSU-1802 $ 26,142 $
Total for Unclustered $ 19,546,686 $ 208,109
Unclustered
Direct Programs:
12.U01 Archaeological Services Midipaldi Butte Garrison 70100 W9128F-16-D-0043 Task $ 7,048 $
Order 0001
12.U02 Educational Service Agreement - Air Force UND F33600-99-A-0080 29,546
12.U03 Educational Service Agreement - Army UND W81K04-17-H-0099 186,497
12.U04 Flight Training Program SROTC Cadets UND MOA UND Flight Training 64,809
12.U05 Navy - Educational Service Agreement UND N00140-98-G2501 123,818
12.U06 Processing of Collection from 32DU16 70100 W9128F-06-M-T026 3,309
Total for Unclustered $ 415,027 $
Research & Development Cluster
Direct Programs:
12.300 Basic and Applied Scientific Research NDSU $ 294,867 $
12.420 Military Medical Research and Development UND 332,997 137,962
12.431 Basic Scientific Research NDSU 201,417
12.RD Hygroscopic Cooling Tower for Reduced HVAC Water UND W912HQ17C0050 271,063
Consumption
E - 43
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Pass Through Non-State Entity:
12.300 Basic and Applied Scientific Research UND Colorado State University G-00976-1 $ 84,711 $
12.420 Military Medical Research and Development UND Institute for Clinical Research FCCC 22784-02 32,272
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201635-140828 95,895 37,673
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201636-140830 158,555
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201637-140831 155,896
12.910 Research and Technology Development NDSU PPG Industries, Inc. 201853-140921 26,806
12.910 Research and Technology Development NDSU PPG Industries, Inc. N/A 4,862
12.RD Commodity Values for the Great Lakes, Mississippi-Ohio NDSU Gulf Engineering and Consultants W9123717F0095 20,799
12.RD Electronically Tunable Materials and Devices NDSU University of Dayton RSC17005 143,840
12.RD Experimental Investigation of the Effect of Sweep NDSU Ohio Aerospace Institute R-700-202370-41022 27,408
12.RD Exploration of Novel Biobased Chemicals in Coatings Syst NDSU Zymergen, Inc. HR0011-15-9-0014 110,218
12.RD WPSON-15-02 Standardized Test Methodologies NDSU Boeing Commercial Airplane 1133183 69,902
Total for Research & Development Cluster $ 2,031,508 $ 175,635
Total For Department Of Defense $ 21,993,221 $ 383,744
Department Of Education
Unclustered
Direct Programs:
84.002 Adult Education - Basic Grants to States 20100 $ 1,116,244 $ 689,358
84.010 Title I Grants to Local Educational Agencies 20100 35,410,788 34,927,365
84.011 Migrant Education State Grant Program 20100 512,959 360,157
84.013 Title I State Agency Program for Neglected and Delinquent 20100 140,199
Children and Youth
84.031 Higher Education Institutional Aid MASU 181,433
84.048 Career and Technical Education -- Basic Grants to States 27000 4,749,181 2,565,473
84.126 Rehabilitation Services Vocational Rehabilitation Grants to 32500 10,317,268
States
84.144 Migrant Education Coordination Program 20100 123,928 113,000
84.161 Rehabilitation Services Client Assistance Program 32500 128,535
84.169 Independent Living - State Grants 32500 397,756 397,756
E - 44
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.177 Rehabilitation Services Independent Living Services for Older 32500 229,092
Individuals Who are Blind
84.181 Special Education-Grants for Infants and Families 32500 2,311,700
84.187 Supported Employment Services for Individuals with the Most 32500 381,772
Significant Disabilities
84.196 Education for Homeless Children and Youth 20100 195,200 97,250
84.224 Assistive Technology 32500 321,534
84.240 Program of Protection and Advocacy of Individual Rights 36000 173,556
84.287 Twenty-First Century Community Learning Centers 20100 6,889,983 6,591,202
84.299 Indian Education -- Special Programs for Indian Children UND 58,856
84.325 Special Education - Personnel Development to Improve MISUB 237,828
Services and Results for Children with Disabilities
84.326 Special Education Technical Assistance and Dissemination to MISU 54,072
Improve Services and Results for Children with Disabilities
84.358 Rural Education 20100 60,646 54,830
84.365 English Language Acquisition State Grants 20100 568,156 422,090
84.366 Mathematics and Science Partnerships 20100 346,547
84.367 Supporting Effective Instruction State Grants (formerly 20100 10,006,186 9,925,283
Improving Teacher Quality State Grants)
84.369 Grants for State Assessments and Related Activities 20100 3,886,923 110
84.371 Comprehensive Literacy Development 20100 4,554,718 4,304,441
84.372 Statewide Longitudinal Data Systems 20100 1,307,424
84.377 School Improvement Grants 20100 870,114 849,728
84.384 Statewide Data Systems, Recovery Act 20100 128,565
84.407 Transition Programs for Students with Intellectual Disabilities MISU 402,661
into Higher Education
84.424 Student Support and Academic Enrichment Program 20100 3,404,854 3,395,712
Pass Through Non-State Entity:
84.004 Civil Rights Training and Advisory Services (also known as UND Indiana University Board of Trustees N/A $ 18,511 $
Equity Assistance Centers)
84.010 Title I Grants to Local Educational Agencies UND Grand Forks Public School District Building N/A 65,844
Authority
84.367 Supporting Effective Instruction State Grants (formerly NDSU National Writing Project 14-ND02-SEED2017-ILI 189
Improving Teacher Quality State Grants)
E - 45
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.368 Competitive Grants for State Assessments (formerly Grants for 20100 North Carolina State Board of Education NC10268347 48,432
Enhanced Assessment Instruments)
84.371 Comprehensive Literacy Development NDSU Fargo Public Schools NDSRCL 1,039
84.411 Education Innovation and Research (formerly Investing in NDSU National Writing Project 14-ND02-2018iC3WP 62,685
Innovation (i3) Fund)
84.411 Education Innovation and Research (formerly Investing in NDSU National Writing Project 14-ND02-2019i3C3WP 367
Innovation (i3) Fund)
84.418 Promoting Readiness of Minors in Supplemental Security MISU Utah State Office of Rehabilitation 146213 326,394 16,215
Income
84.906 American Printing House for the Blind 25300 American Printing House for the Blind 20 U.S.C. 101 104,350
Total for Unclustered $ 90,096,489 $ 64,709,970
Research & Development Cluster
Pass Through Non-State Entity:
84.305 Education Research, Development and Dissemination UND California State University, Chico SUB18-059 $ 50,373 $
Total for Research & Development Cluster $ 50,373 $
Special Education Cluster (IDEA)
Direct Programs:
84.027 Special Education Grants to States 20100 $ 31,597,382 $ 28,865,451
84.173 Special Education Preschool Grants 20100 725,613 681,985
Total for Special Education Cluster (IDEA) $ 32,322,995 $ 29,547,436
Student Financial Assistance Cluster
Direct Programs:
84.007 Federal Supplemental Educational Opportunity Grants MASU $ 58,350 $
84.007 Federal Supplemental Educational Opportunity Grants VCSU 82,272
84.007 Federal Supplemental Educational Opportunity Grants MISUB 44,100
84.007 Federal Supplemental Educational Opportunity Grants MISU 141,620
84.007 Federal Supplemental Educational Opportunity Grants NDSCS 187,392
84.007 Federal Supplemental Educational Opportunity Grants NDSU 783,298
84.007 Federal Supplemental Educational Opportunity Grants DSU 148,492
84.007 Federal Supplemental Educational Opportunity Grants WSC 21,300
84.007 Federal Supplemental Educational Opportunity Grants LRSC 29,850
E - 46
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.007 Federal Supplemental Educational Opportunity Grants BSC 95,900
84.007 Federal Supplemental Educational Opportunity Grants UND 850,790
84.033 Federal Work-Study Program UND 948,557
84.033 Federal Work-Study Program MISUB 29,249
84.033 Federal Work-Study Program VCSU 70,765
84.033 Federal Work-Study Program NDSCS 123,013
84.033 Federal Work-Study Program MISU 140,317
84.033 Federal Work-Study Program BSC 25,491
84.033 Federal Work-Study Program NDSU 414,808
84.033 Federal Work-Study Program DSU 156,130
84.033 Federal Work-Study Program WSC 14,569
84.033 Federal Work-Study Program MASU 103,715
84.033 Federal Work-Study Program LRSC 32,663
84.038 Federal Perkins Loan Program NDSCS 1,277,400
84.038 Federal Perkins Loan Program WSC 164,078
84.038 Federal Perkins Loan Program BSC 261,288
84.038 Federal Perkins Loan Program UND 15,762,718
84.038 Federal Perkins Loan Program MISUB 273,629
84.038 Federal Perkins Loan Program NDSU 7,606,616
84.038 Federal Perkins Loan Program DSU 1,111,553
84.038 Federal Perkins Loan Program LRSC 419,445
84.038 Federal Perkins Loan Program MISU 2,597,467
84.038 Federal Perkins Loan Program VCSU 849,337
84.038 Federal Perkins Loan Program MASU 725,502
84.063 Federal Pell Grant Program BSC 2,612,857
84.063 Federal Pell Grant Program WSC 1,295,774
84.063 Federal Pell Grant Program UND 8,473,847
84.063 Federal Pell Grant Program LRSC 1,289,790
84.063 Federal Pell Grant Program MASU 1,473,152
E - 47
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
84.063 Federal Pell Grant Program NDSU 10,482,023
84.063 Federal Pell Grant Program DSU 1,432,089
84.063 Federal Pell Grant Program MISU 2,891,197
84.063 Federal Pell Grant Program NDSCS 3,167,002
84.063 Federal Pell Grant Program MISUB 1,134,058
84.063 Federal Pell Grant Program VCSU 1,349,528
84.268 Federal Direct Student Loans WSC 1,379,274
84.268 Federal Direct Student Loans NDSU 53,594,415
84.268 Federal Direct Student Loans MISU 8,537,684
84.268 Federal Direct Student Loans MASU 4,135,974
84.268 Federal Direct Student Loans NDSCS 6,978,797
84.268 Federal Direct Student Loans VCSU 4,231,702
84.268 Federal Direct Student Loans UND 67,415,059
84.268 Federal Direct Student Loans MISUB 2,202,724
84.268 Federal Direct Student Loans LRSC 2,224,875
84.268 Federal Direct Student Loans DSU 4,008,444
84.268 Federal Direct Student Loans BSC 6,563,964
84.379 Teacher Education Assistance for College and Higher DSU 7,488
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher MISU 9,813
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher UND 65,696
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher MASU 51,622
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher NDSU 3,744
Education Grants (TEACH Grants)
84.379 Teacher Education Assistance for College and Higher VCSU 4,690
Education Grants (TEACH Grants)
Total for Student Financial Assistance Cluster $ 232,568,956 $
E - 48
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
TRIO Cluster
Direct Programs:
84.042 TRIO Student Support Services LRSC $ 271,741 $
84.042 TRIO Student Support Services DSU 301,481
84.042 TRIO Student Support Services UND 351,983
84.042 TRIO Student Support Services MISU 469,421
84.042 TRIO Student Support Services NDSU 466,112
84.044 TRIO Talent Search UND 469,501
84.047 TRIO Upward Bound NDSU 314,993
84.047 TRIO Upward Bound UND 493,396
84.066 TRIO Educational Opportunity Centers UND 384,374
84.217 TRIO McNair Post-Baccalaureate Achievement UND 255,619
Total for TRIO Cluster $ 3,778,621 $
Total For Department Of Education $ 358,817,434 $ 94,257,406
Department Of Energy
Unclustered
Direct Programs:
81.041 State Energy Program 60100 $ 395,491 $ 178,719
81.042 Weatherization Assistance for Low-Income Persons 60100 2,750,499 2,602,728
81.U01 Direct Restitution (Supplemental Crude Oil Overcharge Refund) 60100 N/A 28,275 28,275
81.U02 State Heating Oil & Propane (SHOPP) 60100 DE-EI0002989 2,013
81.U03 Stripperwell Settlement (Petroleum Violation Escrow Funds) 60100 N/A 3,924
Total for Unclustered $ 3,180,202 $ 2,809,722
Research & Development Cluster
Direct Programs:
81.049 Office of Science Financial Assistance Program NDSU $ 247,428 $
81.049 Office of Science Financial Assistance Program UND 20,349
81.057 University Coal Research UND 76,583 40,694
81.086 Conservation Research and Development UND 768,818
E - 49
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
81.087 Renewable Energy Research and Development UND 210,395 5,281
81.089 Fossil Energy Research and Development UND 23,986,617 4,798,692
81.RD Creation of an Adaptive Remaining Lifetime Prediction NDSU XFC-7-62303-01 20,601
Pass Through Non-State Entity:
81.042 Weatherization Assistance for Low-Income Persons UND Nevada Department of Business and N/A $ 29,178 $
Industry
81.049 Office of Science Financial Assistance Program UND Envergex LLC DE-SC0013832 2,444
81.049 Office of Science Financial Assistance Program UND Envergex LLC DE-SC0015204 235,664
81.049 Office of Science Financial Assistance Program UND Envergex LLC DE-SC0018523 74,457
81.049 Office of Science Financial Assistance Program UND Mainstream Engineering Corporation DE8580 48,561
81.049 Office of Science Financial Assistance Program UND Physical Sciences Inc. SC80628-1964-46 53,623
81.049 Office of Science Financial Assistance Program UND Reaction Engineering International REI 8270-1 4,971
81.049 Office of Science Financial Assistance Program UND TDA Research, Inc. N/A 39,485
81.089 Fossil Energy Research and Development UND Battelle Memorial Institute PO US001-0000726698 201,198
81.089 Fossil Energy Research and Development UND Gas Technology Institute S601 217,805
81.089 Fossil Energy Research and Development UND Microbeam Technologies Incorporated Microbeam Project 1537 18,994
81.089 Fossil Energy Research and Development UND Pennsylvania State University 5963-UND-DOE-6825 11,062
81.089 Fossil Energy Research and Development UND United Technologies Corporation PO 2606146 - 001 26,186
81.089 Fossil Energy Research and Development UND University of Alaska Fairbanks P0528936 32,848
81.089 Fossil Energy Research and Development UND University of Wyoming 1003489A-EERC 61,202
81.089 Fossil Energy Research and Development UND University of Wyoming 1004172 307,330
81.RD Study of Tight Oil Properties UND Sandia National Laboratories 1515304 3,044
81.RD Technical Review and Input of NETL Research - Task 4 UND Leidos Holdings, Inc. PO10227025 9,443
Total for Research & Development Cluster $ 26,708,286 $ 4,844,667
Total For Department Of Energy $ 29,888,488 $ 7,654,389
Department Of Health And Human Services
Unclustered
Direct Programs:
93.041 Special Programs for the Aging, Title VII, Chapter 3, Programs 32500 $ 68,229 $
for Prevention of Elder Abuse, Neglect, and Exploitation
E - 50
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.042 Special Programs for the Aging, Title VII, Chapter 2, Long 32500 75,364
Term Care Ombudsman Services for Older Individuals
93.043 Special Programs for the Aging, Title III, Part D, Disease 32500 97,654
Prevention and Health Promotion Services
93.047 Special Programs for the Aging, Title VI, Part A, Grants to UND 267,153
Indian Tribes, Part B, Grants to Native Hawaiians
93.048 Special Programs for the Aging, Title IV, and Title II, MISU 237,556
Discretionary Projects
93.048 Special Programs for the Aging, Title IV, and Title II, UND 306,674
Discretionary Projects
93.052 National Family Caregiver Support, Title III, Part E 32500 661,551
93.069 Public Health Emergency Preparedness 30100 4,703,912 1,895,027
93.071 Medicare Enrollment Assistance Program MISU 70,393
93.071 Medicare Enrollment Assistance Program 40100 28,936
93.072 Lifespan Respite Care Program 32500 34,105
93.079 Cooperative Agreements to Promote Adolescent Health 20100 95,139
through School-Based HIV/STD Prevention and School-Based
Surveillance
93.092 Affordable Care Act (ACA) Personal Responsibility Education NDSU 239,097 160,807
Program
93.103 Food and Drug Administration Research 60200 30,742
93.103 Food and Drug Administration Research NDSU 48,288
93.103 Food and Drug Administration Research 30100 80,792
93.107 Area Health Education Centers UND 121,680
93.110 Maternal and Child Health Federal Consolidated Programs 30100 180,873 57,316
93.116 Project Grants and Cooperative Agreements for Tuberculosis 30100 173,123
Control Programs
93.124 Nurse Anesthetist Traineeship UND 48,245
93.127 Emergency Medical Services for Children 30100 83,038
93.130 Cooperative Agreements to States/Territories for the 30100 177,704
Coordination and Development of Primary Care Offices
93.136 Injury Prevention and Control Research and State and 30100 298,766 131,086
Community Based Programs
93.137 Community Programs to Improve Minority Health Grant 30100 15,745
Program
E - 51
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.138 Protection and Advocacy for Individuals with Mental Illness 36000 415,004
93.150 Projects for Assistance in Transition from Homelessness 32500 300,200
(PATH)
93.155 Rural Health Research Centers UND 165,441
93.157 Centers of Excellence UND 73
93.165 Grants to States for Loan Repayment 30100 159,350 159,350
93.178 Nursing Workforce Diversity UND 521,686
93.211 Telehealth Programs UND 106,874
93.217 Family Planning Services 30100 1,425,391 888,100
93.223 Development and Coordination of Rural Health Services UND 2,284,429 145,000
93.235 Title V State Sexual Risk Avoidance Education (Title V State 30100 27,371 26,493
SRAE) Program
93.236 Grants to States to Support Oral Health Workforce Activities 30100 197,137 10,000
93.241 State Rural Hospital Flexibility Program UND 848,780 237,517
93.243 Substance Abuse and Mental Health Services Projects of UND 261,725 188,112
Regional and National Significance
93.243 Substance Abuse and Mental Health Services Projects of 32500 1,741,804
Regional and National Significance
93.251 Early Hearing Detection and Intervention MISU 263,083 72,678
93.267 State Grants for Protection and Advocacy Services 36000 50,296
93.268 Immunization Cooperative Agreements 30100 1,855,920 378,547
93.270 Viral Hepatitis Prevention and Control 30100 142,813 72,940
93.283 Centers for Disease Control and Prevention Investigations and 30100 104,608
Technical Assistance
93.301 Small Rural Hospital Improvement Grant Program UND 369,695 297,372
93.305 PPHF 2018: Office of Smoking and Health-National State- 30100 866,952 207,138
Based Tobacco Control Programs-Financed in part by 2018
Prevention and Public Health funds (PPHF)
93.314 Early Hearing Detection and Intervention Information System MISU 150,188
(EHDI-IS) Surveillance Program
93.319 Outreach Programs to Reduce the Prevalence of Obesity in NDSU 207,520 33,267
High Risk Rural Areas
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases 30100 1,614,839
(ELC)
E - 52
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.324 State Health Insurance Assistance Program 40100 222,016
93.332 Cooperative Agreement to Support Navigators in Federally- MISU 62
facilitated Exchanges
93.336 Behavioral Risk Factor Surveillance System 30100 345,525
93.354 Public Health Emergency Response: Cooperative Agreement 30100 1,068,743 176,451
for Emergency Response: Public Health Crisis Response
93.366 State Actions to Improve Oral Health Outcomes and Partner 30100 277,321 28,430
Actions to Improve Oral Health Outcomes
93.426 Improving the Health of Americans through Prevention and 30100 1,223,397 507,180
Management of Diabetes and Heart Disease and Stroke
93.521 The Affordable Care Act: Building Epidemiology, Laboratory, 30100 79,957
and Health Information Systems Capacity in the Epidemiology
and Laboratory Capacity for Infectious Disease (ELC) and
Emerging Infections Program (EIP) Cooperative Agreements;
PPHF
93.539 PPHF Capacity Building Assistance to Strengthen Public 30100 156,692 994
Health Immunization Infrastructure and Performance financed
in part by Prevention and Public Health Funds
93.556 Promoting Safe and Stable Families 32500 182,458 114,110
93.563 Child Support Enforcement 32500 10,878,079
93.566 Refugee and Entrant Assistance State/Replacement Designee 32500 1,652,507 908,055
Administered Programs
93.568 Low-Income Home Energy Assistance 32500 22,585,818 636,275
93.569 Community Services Block Grant 60100 3,466,406 3,370,773
93.586 State Court Improvement Program 18000 115,161
93.590 Community-Based Child Abuse Prevention Grants 32500 239,738 36,914
93.597 Grants to States for Access and Visitation Programs 32500 110,775
93.599 Chafee Education and Training Vouchers Program (ETV) 32500 146,477
93.603 Adoption and Legal Guardianship Incentive Payments 32500 265,183
93.618 Voting Access for Individuals with Disabilities-Grants for 36000 116,907
Protection and Advocacy Systems
93.630 Developmental Disabilities Basic Support and Advocacy Grants 32500 657,621 174,308
93.630 Developmental Disabilities Basic Support and Advocacy Grants 36000 276,242
93.632 University Centers for Excellence in Developmental Disabilities MISU 601,885 12,212
Education, Research, and Service
E - 53
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.643 Children's Justice Grants to States 32500 40,230 27,319
93.645 Stephanie Tubbs Jones Child Welfare Services Program 32500 148,373
93.658 Foster Care Title IV-E 32500 13,808,305 22,490
93.659 Adoption Assistance 32500 8,004,574 96,201
93.667 Social Services Block Grant 32500 7,381,114
93.669 Child Abuse and Neglect State Grants 32500 128,163 128,163
93.671 Family Violence Prevention and Services/Domestic Violence 30100 788,242 756,919
Shelter and Supportive Services
93.674 John H. Chafee Foster Care Program for Successful Transition 32500 495,353 436,515
to Adulthood
93.732 Mental and Behavioral Health Education and Training Grants UND 400,828
93.733 Capacity Building Assistance to Strengthen Public Health 30100 129,882
Immunization Infrastructure and Performance – financed in part
by the Prevention and Public Health Fund (PPHF)
93.735 State Public Health Approaches for Ensuring Quitline Capacity 30100 50,000
– Funded in part by Prevention and Public Health Funds
(PPHF)
93.747 Elder Abuse Prevention Interventions Program UND 372,101 181,383
93.757 State and Local Public Health Actions to Prevent Obesity, 30100 316,713 53,948
Diabetes, Heart Disease and Stroke (PPHF)
93.758 Preventive Health and Health Services Block Grant funded 30100 168,375 67,515
solely with Prevention and Public Health Funds (PPHF)
93.767 Children's Health Insurance Program 32500 32,915,308
93.788 Opioid STR 32500 2,576,895 119,461
93.791 Money Follows the Person Rebalancing Demonstration 32500 2,076,571 52,520
93.815 Domestic Ebola Supplement to the Epidemiology and 30100 144,632
Laboratory Capacity for Infectious Diseases (ELC).
93.843 ACL Assistive Technology State Grants for Protection and 36000 61,393
Advocacy
93.859 Biomedical Research and Research Training UND 344
93.866 Aging Research UND 40,362
93.889 National Bioterrorism Hospital Preparedness Program 30100 937,025 321,638
93.898 Cancer Prevention and Control Programs for State, Territorial 30100 1,770,169 135,148
and Tribal Organizations
E - 54
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.898 Cancer Prevention and Control Programs for State, Territorial UND 341,594
and Tribal Organizations
93.913 Grants to States for Operation of State Offices of Rural Health UND 175,430
93.917 HIV Care Formula Grants 30100 2,074,728 476,892
93.940 HIV Prevention Activities Health Department Based 30100 933,472 101,116
93.945 Assistance Programs for Chronic Disease Prevention and 30100 9,269
Control
93.946 Cooperative Agreements to Support State-Based Safe 30100 183,521 1,338
Motherhood and Infant Health Initiative Programs
93.958 Block Grants for Community Mental Health Services 32500 997,840 141,638
93.959 Block Grants for Prevention and Treatment of Substance Abuse 32500 7,544,257 314,279
93.970 Health Professions Recruitment Program for Indians UND 1,250,110
93.977 Sexually Transmitted Diseases (STD) Prevention and Control 30100 226,647
Grants
93.991 Preventive Health and Health Services Block Grant 30100 208,030 175,840
93.994 Maternal and Child Health Services Block Grant to the States 30100 1,626,792 541,821
Nonmonetary Assistance:
93.268 Immunization Cooperative Agreements 30100 $ 7,889,233 $ 7,846,190
Pass Through Non-State Entity:
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-FPTF-1709-05464 $ 671 $
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-SP-1709-05451 2,500
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-T-1709-05290 2,476
93.103 Food and Drug Administration Research 30100 Association of Food and Drug Officials G-T-1809-06092 1,832
93.110 Maternal and Child Health Federal Consolidated Programs 30100 Association of State Public Health 5 U7NMC30388-03-00 6,928 5,722
Nutritionists
93.110 Maternal and Child Health Federal Consolidated Programs 30100 Colorado School of Public Health FY17.368.017 24,993
FY18.368.002_AMD3 2-5-
M6595
93.155 Rural Health Research Centers UND National Rural Health Association UA9RH26027 14
93.243 Substance Abuse and Mental Health Services Projects of UND Grand Forks Housing Authority 3 8,199
Regional and National Significance
93.424 NON-ACA/PPHF—Building Capacity of the Public Health MISU Association of University Centers on N/A 4,093
System to Improve Population Health through National Disabilities
Nonprofit Organizations
E - 55
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.424 NON-ACA/PPHF—Building Capacity of the Public Health 30100 Council of State and Territorial PO6189 14,057
System to Improve Population Health through National Epidemiologists
Nonprofit Organizations
93.433 ACL National Institute on Disability, Independent Living, and MISU University of Alaska Anchorage N/A 5,708
Rehabilitation Research
93.566 Refugee and Entrant Assistance State/Replacement Designee NDSCS Lutheran Social Services of North 2019-RSS 7 7,200
Administered Programs Dakota/United Way
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State 18-21 55,495
University of New York
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State R1103841 124,871
University of New York
93.648 Child Welfare Research Training or Demonstration UND The Research Foundation for the State R1148796 278,981
University of New York
93.788 Opioid STR NDSU Leech Lake Tribe of Ojibwe N/A 8,935
93.788 Opioid STR NDSU South Dakota State University 3TB352 30,814
93.788 Opioid STR UND University of Missouri System 0090497 / 00066589 215,996
93.879 Medical Library Assistance UND The University of Iowa N/A 4,112
93.879 Medical Library Assistance UND The University of Iowa W000961389 15,399
93.884 Grants for Primary Care Training and Enhancement UND University of Washington UWSC10279 / BPO 41185 50,620
93.912 Rural Health Care Services Outreach, Rural Health Network UND Valley City-County Health District N/A 36,524
Development and Small Health Care Provider Quality
Improvement
Total for Unclustered $ 164,011,201 $ 22,930,508
Unclustered
Direct Programs:
93.U01 MSQA Inspections 30100 HHSF223201710056C $ 68,156 $
93.U02 Medicated Feeds 60200 HHSF223201810106C 6,799
93.U03 Medicated Feeds 60200 HHSF223201710180C 22,655
Total for Unclustered $ 97,610 $
Aging Cluster
Direct Programs:
93.044 Special Programs for the Aging, Title III, Part B, Grants for 32500 $ 2,008,157 $ 270,043
Supportive Services and Senior Centers
93.045 Special Programs for the Aging, Title III, Part C, Nutrition 32500 3,275,539
Services
E - 56
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.053 Nutrition Services Incentive Program 32500 790,036
Total for Aging Cluster $ 6,073,732 $ 270,043
CCDF Cluster
Direct Programs:
93.575 Child Care and Development Block Grant 32500 $ 9,652,521 $ 1,355,121
93.596 Child Care Mandatory and Matching Funds of the Child Care 32500 5,503,764
and Development Fund
Total for CCDF Cluster $ 15,156,285 $ 1,355,121
Head Start Cluster
Direct Programs:
93.600 Head Start MASU $ 3,248,766 $
93.600 Head Start 20100 126,910
Nonmonetary Assistance:
93.600 Head Start MASU $ 704,228 $
Total for Head Start Cluster $ 4,079,904 $
Medicaid Cluster
Direct Programs:
93.777 State Survey and Certification of Health Care Providers and 30100 $ 1,771,532 $
Suppliers (Title XVIII) Medicare
93.777 State Survey and Certification of Health Care Providers and 32500 1,077,642
Suppliers (Title XVIII) Medicare
93.778 Medical Assistance Program 32500 770,723,385
Total for Medicaid Cluster $ 773,572,559 $
Research & Development Cluster
Direct Programs:
93.103 Food and Drug Administration Research NDSU $ 60,492 $
93.121 Oral Diseases and Disorders Research UND 2,248
93.242 Mental Health Research Grants NDSU 49,960
93.242 Mental Health Research Grants UND 688,775
93.243 Substance Abuse and Mental Health Services Projects of UND 1,417,610 813,687
Regional and National Significance
E - 57
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.247 Advanced Nursing Education Workforce Grant Program NDSU 316,548
93.273 Alcohol Research Programs UND 98,005
93.279 Drug Abuse and Addiction Research Programs UND 128,625
93.286 Discovery and Applied Research for Technological Innovations NDSU 472
to Improve Human Health
93.393 Cancer Cause and Prevention Research UND 75,228
93.395 Cancer Treatment Research UND 211,090
93.396 Cancer Biology Research NDSU 198,373
93.837 Cardiovascular Diseases Research NDSU 152,060
93.838 Lung Diseases Research NDSU 526,056 67,382
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research NDSU 922,094 744,000
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research UND 364,948
93.853 Extramural Research Programs in the Neurosciences and UND 177,928
Neurological Disorders
93.855 Allergy and Infectious Diseases Research NDSU 232,218 55,702
93.855 Allergy and Infectious Diseases Research UND 1,275,728 48,540
93.859 Biomedical Research and Research Training UND 6,408,337 539,466
93.859 Biomedical Research and Research Training NDSU 3,655,120 217,120
93.866 Aging Research UND 570,747
93.866 Aging Research NDSU 718,717 203,154
93.867 Vision Research NDSU 760
Pass Through Non-State Entity:
93.103 Food and Drug Administration Research NDSU Iowa State University 430-30-01C $ 8,000 $
93.113 Environmental Health UND Triad Interactive Media, Inc. 007 14,870
93.242 Mental Health Research Grants NDSU University of North Carolina at Chapel Hill 5107333 2,468
93.262 Occupational Safety and Health Program NDSU Colorado State University G-61105-02 20,333
93.262 Occupational Safety and Health Program NDSU University of Nebraska-Omaha 35-5420-2006-208 2,939
93.273 Alcohol Research Programs UND Public Health Institute PA-11-308 139,330
93.273 Alcohol Research Programs NDSU Sanford Research North 51-2028-5031-0 20,141
93.273 Alcohol Research Programs NDSU Sanford Research North SR-2019-205 83,685
E - 58
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
93.273 Alcohol Research Programs UND University of Illinois 16344 2,578
93.279 Drug Abuse and Addiction Research Programs UND Drexel University 800018 8,256
93.279 Drug Abuse and Addiction Research Programs UND Drexel University PO U0176282 11,232
93.279 Drug Abuse and Addiction Research Programs UND University Of Alabama At Birmingham 000519026-001 3,359
93.307 Minority Health and Health Disparities Research UND Sanford Research SR-2017-18 125
93.505 Affordable Care Act (ACA) Maternal, Infant, and Early NDSU Prevent Child Abuse North Dakota N/A 101,742
Childhood Home Visiting Program
93.648 Child Welfare Research Training or Demonstration UND University of Nebraska 24-0520-0261-006 18,741
93.734 Empowering Older Adults and Adults with Disabilities through UND National Council on Aging, Inc. N/A 16,090
Chronic Disease Self-Management Education Programs –
financed by Prevention and Public Health Funds (PPHF)
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research UND Regents of the University of Michigan 3004429441 136,625
93.853 Extramural Research Programs in the Neurosciences and UND Trinity College NS065957-01 45,457
Neurological Disorders
93.855 Allergy and Infectious Diseases Research UND University of Kentucky 3200000654-17-017 30,664
93.855 Allergy and Infectious Diseases Research UND University of Kentucky 3200001545-18-174 26,474
93.859 Biomedical Research and Research Training UND BBC Entrepreneurial Training & Consulting, ND2018 11,146
LLC
93.859 Biomedical Research and Research Training NDSU Montana State University G179-16-W5698 46,850
93.859 Biomedical Research and Research Training UND University of Colorado Board of Regents 1554623 12,951
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2005-002 1,199
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2005-003 14,557
93.859 Biomedical Research and Research Training UND University of Nebraska 34-5250-2005-923 9,264
93.859 Biomedical Research and Research Training NDSU University of Nebraska Medical Center 34-5250-2005-003 16,667
93.859 Biomedical Research and Research Training NDSU University of Nebraska-Omaha 34-5250-2005-002 24,678
93.859 Biomedical Research and Research Training NDSU University of Nebraska-Omaha 34-5250-2005-743 38,989
93.865 Child Health and Human Development Extramural Research NDSU University of Texas Medical Branch 19-84471 / PO1631 14,277
93.867 Vision Research UND Barron Associates, Inc. 536-SC01 46,194
93.870 Maternal, Infant and Early Childhood Home Visiting Grant NDSU Prevent Child Abuse North Dakota N/A 224,247
93.933 Demonstration Projects for Indian Health UND Cankdeska Cikana Community College N/A 11,816
93.945 Assistance Programs for Chronic Disease Prevention and UND Montana Department of Public Health and 14096760050 162,540
Control Human Services
Total for Research & Development Cluster $ 19,580,623 $ 2,689,051
E - 59
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Student Financial Assistance Cluster
Direct Programs:
93.264 Nurse Faculty Loan Program (NFLP) UND $ 131,254 $
93.342 Health Professions Student Loans, Including Primary Care UND 407,510
Loans/Loans for Disadvantaged Students
93.364 Nursing Student Loans DSU 274,440
93.364 Nursing Student Loans MISU 977,543
93.364 Nursing Student Loans NDSU 339,222
93.364 Nursing Student Loans UND 1,457,305
93.925 Scholarships for Health Professions Students from UND 638,724
Disadvantaged Backgrounds
Total for Student Financial Assistance Cluster $ 4,225,998 $
TANF Cluster
Direct Programs:
93.558 Temporary Assistance for Needy Families 32500 $ 28,964,353 $ 152,869
Total for TANF Cluster $ 28,964,353 $ 152,869
Total For Department Of Health And Human Services $ 1,015,762,265 $ 27,397,592
Department Of Homeland Security
Unclustered
Direct Programs:
97.012 Boating Safety Financial Assistance 72000 $ 711,171 $ 25,112
97.023 Community Assistance Program State Support Services 77000 133,282
Element (CAP-SSSE)
97.029 Flood Mitigation Assistance 54000 2,811 2,732
97.036 Disaster Grants - Public Assistance (Presidentially Declared 54000 7,928,707 6,046,718
Disasters)
97.039 Hazard Mitigation Grant 54000 4,471,941 4,172,541
97.041 National Dam Safety Program 77000 61,857
97.042 Emergency Management Performance Grants 54000 2,871,060 1,274,426
97.045 Cooperating Technical Partners 77000 3,976,519
97.047 Pre-Disaster Mitigation 54000 852,464 667,953
E - 60
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
97.067 Homeland Security Grant Program 54000 4,214,781 3,132,837
Total for Unclustered $ 25,224,593 $ 15,322,319
Total For Department Of Homeland Security $ 25,224,593 $ 15,322,319
Department Of Housing And Urban Development
Unclustered
Direct Programs:
14.171 Manufactured Home Dispute Resolution 60100 $ 3,658 $
14.228 Community Development Block Grants/State's program and 60100 4,767,626 4,648,652
Non-Entitlement Grants in Hawaii
14.231 Emergency Solutions Grant Program 60100 477,413 432,972
14.238 Shelter Plus Care 60100 193,804 193,804
14.239 HOME Investment Partnerships Program 60100 2,066,245 1,966,811
14.401 Fair Housing Assistance Program State and Local 40600 25,500
Total for Unclustered $ 7,534,246 $ 7,242,239
Total For Department Of Housing And Urban Development $ 7,534,246 $ 7,242,239
Department Of Justice
Unclustered
Direct Programs:
16.017 Sexual Assault Services Formula Program 30100 $ 312,800 $ 296,757
16.320 Services for Trafficking Victims 12500 340,855
16.540 Juvenile Justice and Delinquency Prevention 53000 214,935 214,935
16.543 Missing Children's Assistance 12500 264,926
16.575 Crime Victim Assistance 53000 7,761
16.576 Crime Victim Compensation 53000 2,943,395 2,915,921
16.582 Crime Victim Assistance/Discretionary Grants 53000 6,000
16.588 Violence Against Women Formula Grants 30100 947,970 861,970
16.589 Rural Domestic Violence, Dating Violence, Sexual Assault, and UND 127,750
Stalking Assistance Program
16.596 Justice System Infrastructure Program for Indian Tribes UND 277,625 102,688
E - 61
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
16.606 State Criminal Alien Assistance Program 53000 1,746
16.609 Project Safe Neighborhoods 12500 1,233
16.616 Indian Country Alcohol and Drug Prevention UND 76,614 67,272
16.710 Public Safety Partnership and Community Policing Grants 12500 158,650
16.738 Edward Byrne Memorial Justice Assistance Grant Program 12500 543,104 248,911
16.741 DNA Backlog Reduction Program 12500 199,244
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program 12500 202,006
16.750 Support for Adam Walsh Act Implementation Grant Program 12500 175,074
16.813 NICS Act Record Improvement Program 12500 352,589
Pass Through Non-State Entity:
16.029 Office on Violence Against Women Special Projects UND Tribal Law and Policy Institute N/A $ 33,463 $
16.582 Crime Victim Assistance/Discretionary Grants UND Fox Valley Technical College D2016006026 31,563
16.582 Crime Victim Assistance/Discretionary Grants UND Fox Valley Technical College D2019012073 3,585
16.726 Juvenile Mentoring Program NDSU National 4-H Council 2017-JU-FX-0016 88,361
16.726 Juvenile Mentoring Program NDSU National 4-H Council 2018-JU-FX-0005 5,196
16.751 Edward Byrne Memorial Competitive Grant Program UND Fox Valley Technical College D2015015036 58,618
16.815 Tribal Civil and Criminal Legal Assistance Grants, Training and UND American Probation And Parole Association 16-SA-085-2387 138,373
Technical Assistance
Total for Unclustered $ 7,513,436 $ 4,708,454
Unclustered
Direct Programs:
16.U01 Federal Bureau of Prisons (Juvenile Inmate Housing) 53000 IGA-815-11 $ 105,947 $
Total for Unclustered $ 105,947 $
Research & Development Cluster
Direct Programs:
16.RD A Study of Federal Absconsion and Revocation: Patterns NDSU NDXPROB17-000252 $ 8,987 $
Total for Research & Development Cluster $ 8,987 $
Total For Department Of Justice $ 7,628,370 $ 4,708,454
E - 62
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Department Of Labor
Unclustered
Direct Programs:
17.235 Senior Community Service Employment Program 32500 $ 541,443 $ 523,521
17.282 Trade Adjustment Assistance Community College and Career BSC 185,278 77,337
Training (TAACCCT) Grants
17.504 Consultation Agreements BSC 538,341
17.600 Mine Health and Safety Grants 27000 206,876 206,876
Total for Unclustered $ 1,471,938 $ 807,734
Total For Department Of Labor $ 1,471,938 $ 807,734
Department Of State
Unclustered
Direct Programs:
19.040 Public Diplomacy Programs UND $ 3,249 $
Pass Through Non-State Entity:
19.402 Professional and Cultural Exchange Programs - International MISU Global Ties U.S. S-ECAGD-18-CA-1018 $ 2,284 $
Visitor Leadership Program
19.402 Professional and Cultural Exchange Programs - International MISU Global Ties U.S. S-ECAGD-19-CA-0041 441
Visitor Leadership Program
Total for Unclustered $ 5,974 $
Total For Department Of State $ 5,974 $
Department Of The Interior
Unclustered
Direct Programs:
15.224 Cultural and Paleontological Resources Management 70100 $ 20,315 $
15.224 Cultural and Paleontological Resources Management MISU 2,937
15.250 Regulation of Surface Coal Mining and Surface Effects of 40800 947,375
Underground Coal Mining
15.252 Abandoned Mine Land Reclamation (AMLR) 40800 2,919,037
15.427 Federal Oil and Gas Royalty Management State and Tribal 11700 584,313
Coordination
E - 63
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
15.433 Flood Control Act Lands 12000 36,987,166 36,987,166
15.436 Late Disbursement Interest 12000 51,011 10,712
15.437 Minerals Leasing Act 12000 44,185,597 20,797,847
15.518 Garrison Diversion Unit 72000 877,589
15.608 Fish and Wildlife Management Assistance 72000 87,035
15.615 Cooperative Endangered Species Conservation Fund 72000 55,044 24,887
15.615 Cooperative Endangered Species Conservation Fund 75000 14,959
15.634 State Wildlife Grants 72000 469,964 122,370
15.634 State Wildlife Grants MISUB 37,551
15.637 Migratory Bird Joint Ventures 72000 74,927 74,927
15.808 U.S. Geological Survey Research and Data Collection 77000 41,112
15.904 Historic Preservation Fund Grants-In-Aid 70100 613,225 148,220
15.916 Outdoor Recreation Acquisition, Development and Planning 75000 600,776 573,755
15.929 Save America's Treasures 70100 13,581
15.931 Conservation Activities by Youth Service Organizations NDSU 34,775
Pass Through Non-State Entity:
15.518 Garrison Diversion Unit 77000 Garrison Diversion Conservancy District 6-FC-60-00210 $ 12,131,665 $
15.815 National Land Remote Sensing Education Outreach and UND AmericaView AV18-ND-01 12,159
Research
15.939 Heritage Partnership NDSU Northern Plains Heritage Foundation P10AC00310 1,881
Total for Unclustered $ 100,763,994 $ 58,739,884
Unclustered
Direct Programs:
15.U01 Artifact Cataloging 70100 140F0618P0094 $ 2,471 $
Total for Unclustered $ 2,471 $
Fish and Wildlife Cluster
Direct Programs:
15.605 Sport Fish Restoration 72000 $ 4,227,682 $ 583,435
15.611 Wildlife Restoration and Basic Hunter Education 72000 12,074,924 2,421,268
15.626 Enhanced Hunter Education and Safety 72000 74,522 74,522
Total for Fish and Wildlife Cluster $ 16,377,128 $ 3,079,225
E - 64
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Research & Development Cluster
Direct Programs:
15.608 Fish and Wildlife Management Assistance NDSU $ 13,419 $
15.678 Cooperative Ecosystem Studies Units NDSU 26,318
15.805 Assistance to State Water Resources Research Institutes NDSU 87,780 6,444
15.808 U.S. Geological Survey Research and Data Collection UND 33,354
15.808 U.S. Geological Survey Research and Data Collection NDSU 79,258
15.923 National Center for Preservation Technology and Training NDSU 16,356
15.945 Cooperative Research and Training Programs – Resources of NDSU 99,172
the National Park System
15.945 Cooperative Research and Training Programs – Resources of UND 22,049
the National Park System
Total for Research & Development Cluster $ 377,706 $ 6,444
Total For Department Of The Interior $ 117,521,299 $ 61,825,553
Department Of Transportation
Unclustered
Direct Programs:
20.106 Airport Improvement Program 41200 $ 551,870 $
20.200 Highway Research and Development Program 80100 17,544
20.200 Highway Research and Development Program NDSU 3,877
20.215 Highway Training and Education 80100 169,686
20.240 Fuel Tax Evasion-Intergovernmental Enforcement Effort 12700 12,394
20.314 Railroad Development 80100 245,121
20.505 Metropolitan Transportation Planning and State and Non- 80100 570,303 570,303
Metropolitan Planning and Research
20.509 Formula Grants for Rural Areas and Tribal Transit Program 80100 5,988,005 5,979,118
20.700 Pipeline Safety Program State Base Grant 40800 219,092
20.703 Interagency Hazardous Materials Public Sector Training and 54000 385,815 68,070
Planning Grants
20.721 PHMSA Pipeline Safety Program One Call Grant 40800 23,747
Total for Unclustered $ 8,187,454 $ 6,617,491
E - 65
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Unclustered
Direct Programs:
20.U02 Accelerated Safety Activity Program 80100 DTNH22-17-H-00142 $ 15,361 $
20.U03 Air Force Junior Reserve Officer Training Corps (AFJROTC) UND FA3300-19-H-0013 81,533
Pass Through Non-State Entity:
20.U01 5010 Inspections 41200 GCR Inc. N/A $ 15,600 $
Total for Unclustered $ 112,494 $
Federal Motor Carrier Safety Assistance Cluster
Direct Programs:
20.218 Motor Carrier Safety Assistance 50400 $ 2,595,323 $
Total for Federal Motor Carrier Safety Assistance Cluster $ 2,595,323 $
Federal Transit Cluster
Direct Programs:
20.500 Federal Transit Capital Investment Grants 80100 $ 23,837 $ 23,837
20.526 Buses and Bus Facilities Formula, Competitive, and Low or No 80100 3,616,542 3,616,542
Emissions Programs
Total for Federal Transit Cluster $ 3,640,379 $ 3,640,379
Highway Planning and Construction Cluster
Direct Programs:
20.205 Highway Planning and Construction 80100 $ 313,694,509 $ 5,926,697
20.219 Recreational Trails Program 75000 1,049,602 300,482
Pass Through Non-State Entity:
20.205 Highway Planning and Construction NDSU Bismarck-Mandan Metropolitan Planning 38151860 Bis-Man $ 33,662 $
Organization
20.205 Highway Planning and Construction NDSU Fargo-Moorhead Metropolitan Council of 38151860- FM COG 5,232
Governments
20.205 Highway Planning and Construction NDSU Grand Forks-East Grand Forks Metropolitan 38151860- GF/EGF MPO 45,789
Council of Governments
Total for Highway Planning and Construction Cluster $ 314,828,794 $ 6,227,179
Highway Safety Cluster
Direct Programs:
20.600 State and Community Highway Safety 80100 $ 1,924,248 $ 331,813
E - 66
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
20.616 National Priority Safety Programs 80100 2,487,340 554,057
Total for Highway Safety Cluster $ 4,411,588 $ 885,870
Research & Development Cluster
Direct Programs:
20.109 Air Transportation Centers of Excellence UND $ 11,587 $
20.232 Commercial Driver's License Program Implementation Grant NDSU 224,739
20.701 University Transportation Centers Program NDSU 2,388,570 1,830,138
20.724 Pipeline Safety Research Competitive Academic Agreement NDSU 228,786
Program (CAAP)
20.RD A18_A11L.UAS.22-Small UAS Detect and Avoid Requirements UND 15-C-UAS-UND-011 74,009
20.RD UAS Parameters, Exceedances, Recording Rates for ASIAS UND 15-C-UAS-UND-012 24,518
20.RD UAS Test Data Collection and Analysis UND 15-C-UAS-UND-010 60,108 27,888
Pass Through Non-State Entity:
20.108 Aviation Research Grants UND The MITRE Corporation 119947 TaskOrder 2-125004 $ 169,674 $
20.200 Highway Research and Development Program NDSU WSP Global Inc. WSP #182618G 62,001
20.205 Highway Planning and Construction NDSU Minnesota Department of Transportation 1003323 Work Order No. 6 14,056
20.600 State and Community Highway Safety NDSU South Dakota Department of Public Safety N/A 16,717
20.701 University Transportation Centers Program NDSU Montana State University G136-14-W4660 105,914
20.701 University Transportation Centers Program NDSU Montana State University G226-17-W6460 323,266
20.RD Seat Belt Use in South Dakota NDSU South Dakota Department of Public Safety SDDOT 1-1-2019 11,776
Total for Research & Development Cluster $ 3,715,721 $ 1,858,026
Transit Services Programs Cluster
Direct Programs:
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities 80100 $ 736,210 $ 736,210
Total for Transit Services Programs Cluster $ 736,210 $ 736,210
Total For Department Of Transportation $ 338,227,963 $ 19,965,155
Department Of Veterans Affairs
Unclustered
Direct Programs:
64.014 Veterans State Domiciliary Care 31300 $ 1,021,311 $
E - 67
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
64.015 Veterans State Nursing Home Care 31300 1,553,978
64.035 Veterans Transportation Program 32100 547,463 488,881
Total for Unclustered $ 3,122,752 $ 488,881
Unclustered
Direct Programs:
64.U01 State Approving Agency 32100 V101 (223C) P-5745 $ 120,828 $
64.U02 VA Processing Fee NDSU VA01241994 2,135
64.U03 Veterans Administration - Residents Rotations UND 7-1-1994 395,002
Total for Unclustered $ 517,965 $
Total For Department Of Veterans Affairs $ 3,640,717 $ 488,881
Environmental Protection Agency
Unclustered
Direct Programs:
66.034 Surveys, Studies, Research, Investigations, Demonstrations, 30100 $ 114,651 $
and Special Purpose Activities Relating to the Clean Air Act
66.040 State Clean Diesel Grant Program 30100 163,877 163,877
66.419 Water Pollution Control State, Interstate, and Tribal Program 30100 244,402 3,530
Support
66.433 State Underground Water Source Protection 40500 104,000
66.454 Water Quality Management Planning 30100 108,031 68,340
66.460 Nonpoint Source Implementation Grants 30100 3,896,585 2,272,643
66.605 Performance Partnership Grants 30100 4,057,527 41,503
66.605 Performance Partnership Grants NDSU 86,459
66.608 Environmental Information Exchange Network Grant Program 30100 148,720
and Related Assistance
66.700 Consolidated Pesticide Enforcement Cooperative Agreements 60200 341,997
66.804 Underground Storage Tank (UST) Prevention, Detection, and 30100 214,084
Compliance Program
66.805 Leaking Underground Storage Tank Trust Fund Corrective 30100 483,967
Action Program
66.817 State and Tribal Response Program Grants 30100 87,215
E - 68
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
66.U01 Water Sample Collection VCSU W912ES-16-P-0058 8,606
Pass Through Non-State Entity:
66.460 Nonpoint Source Implementation Grants NDSU Dakota Prairies RC&D N/A $ 6,619 $
66.716 Research, Development, Monitoring, Public Education, NDSU eXtension Foundation 83698001 19,800
Outreach, Training, Demonstrations, and Studies
66.716 Research, Development, Monitoring, Public Education, NDSU eXtension Foundation SA-2017-61 12,694
Outreach, Training, Demonstrations, and Studies
Total for Unclustered $ 10,099,234 $ 2,549,893
Drinking Water State Revolving Fund Cluster
Direct Programs:
66.468 Capitalization Grants for Drinking Water State Revolving Funds 30100 $ 662,813 $
Total for Drinking Water State Revolving Fund Cluster $ 662,813 $
Research & Development Cluster
Direct Programs:
66.461 Regional Wetland Program Development Grants NDSU $ 50,826 $
66.516 P3 Award: National Student Design Competition for NDSU 4,029
Sustainability
Total for Research & Development Cluster $ 54,855 $
Total For Environmental Protection Agency $ 10,816,902 $ 2,549,893
Equal Employment Opportunity Commission
Unclustered
Direct Programs:
30.002 Employment Discrimination - State and Local Fair Employment 40600 $ 126,350 $
Practices Agency Contracts
Total for Unclustered $ 126,350 $
Total For Equal Employment Opportunity Commission $ 126,350 $
Executive Office of the President
Unclustered
Direct Programs:
95.001 High Intensity Drug Trafficking Areas Program 12500 $ 809,780 $ 391,151
Total for Unclustered $ 809,780 $ 391,151
E - 69
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Total For Executive Office of the President $ 809,780 $ 391,151
General Services Administration
Unclustered
Nonmonetary Assistance:
39.003 Donation of Federal Surplus Personal Property 11000 $ 1,447,880 $
Total for Unclustered $ 1,447,880 $
Total For General Services Administration $ 1,447,880 $
Institute of Museum and Library Services
Unclustered
Direct Programs:
45.310 Grants to States 25000 $ 970,427 $
Total for Unclustered $ 970,427 $
Total For Institute of Museum and Library Services $ 970,427 $
National Aeronautics and Space Administration
Unclustered
Direct Programs:
43.001 Science UND $ 10,702 $
43.008 Office of Stem Engagement (OSTEM) UND 1,170,529 24,490
Pass Through Non-State Entity:
43.012 Space Technology 60100 University of North Dakota N/A $ 178,493 $
Total for Unclustered $ 1,359,724 $ 24,490
Research & Development Cluster
Direct Programs:
43.001 Science UND $ 474,604 $ 33,604
43.008 Office of Stem Engagement (OSTEM) UND 126,522
Pass Through Non-State Entity:
43.001 Science UND Planetary Science Institute 1345 $ 2,784 $
43.001 Science NDSU University of New Hampshire 15-024 136,365
Total for Research & Development Cluster $ 740,275 $ 33,604
Total For National Aeronautics and Space Administration $ 2,099,999 $ 58,094
E - 70
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
National Endowment for the Arts
Unclustered
Direct Programs:
45.025 Promotion of the Arts Partnership Agreements 70900 $ 724,600 $ 565,785
Pass Through Non-State Entity:
45.024 Promotion of the Arts Grants to Organizations and Individuals DSU Arts Midwest 1844334-52-C-18 $ 6,028 $
Total for Unclustered $ 730,628 $ 565,785
Total For National Endowment for the Arts $ 730,628 $ 565,785
National Endowment for the Humanities
Unclustered
Direct Programs:
45.149 Promotion of the Humanities Division of Preservation and 70100 $ 121,466 $
Access
Pass Through Non-State Entity:
45.129 Promotion of the Humanities Federal/State Partnership DSU Humanities North Dakota 18504 $ 9,250 $
45.129 Promotion of the Humanities Federal/State Partnership BSC Humanities North Dakota N/A 2,900
Total for Unclustered $ 133,616 $
Total For National Endowment for the Humanities $ 133,616 $
National Science Foundation
Unclustered
Direct Programs:
47.070 Computer and Information Science and Engineering UND $ 3,175 $
47.076 Education and Human Resources NDSCS 84,784
Total for Unclustered $ 87,959 $
Unclustered
Direct Programs:
47.U01 IPA - Intergovernmental Personal Act NDSU CNS-1650752 $ 163,759 $
Total for Unclustered $ 163,759 $
E - 71
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Research & Development Cluster
Direct Programs:
47.041 Engineering UND $ 30,057 $
47.041 Engineering NDSU 531,073 14,880
47.049 Mathematical and Physical Sciences NDSU 261,990
47.049 Mathematical and Physical Sciences UND 267,965 6,905
47.050 Geosciences UND 252,343
47.050 Geosciences NDSU 168,227
47.070 Computer and Information Science and Engineering UND 215,520 189,770
47.070 Computer and Information Science and Engineering NDSU 1,007,594 13,358
47.074 Biological Sciences NDSU 1,110,555
47.074 Biological Sciences UND 846,535
47.075 Social, Behavioral, and Economic Sciences NDSU 160,287
47.075 Social, Behavioral, and Economic Sciences UND 20,941
47.076 Education and Human Resources NDSU 1,351,553 32,284
47.076 Education and Human Resources WSC 51,456
47.076 Education and Human Resources UND 452,460 26,785
47.079 Office of International Science and Engineering UND 144,138 2,897
47.083 Integrative Activities NDSU 5,632,579 1,066,090
Pass Through Non-State Entity:
47.041 Engineering NDSU Sunstrand LLC N/A $ 1,426 $
47.041 Engineering UND The University of Utah 10040267/58502300 21,413
47.041 Engineering NDSU Uniqarta N/A 37,436
47.041 Engineering NDSU University of Minnesota A005007501 43,475
47.050 Geosciences NDSU Purdue University 4101-70253 7,433
47.070 Computer and Information Science and Engineering UND University of Illinois 067846-17002 40,317
47.070 Computer and Information Science and Engineering NDSU University of South Alabama A19-0025-S001 38,067
47.075 Social, Behavioral, and Economic Sciences NDSU Michigan State University RC108528NDSU 30,840
47.075 Social, Behavioral, and Economic Sciences NDSU University of Hawaii MA1351 2,286
47.075 Social, Behavioral, and Economic Sciences NDSU University of Minnesota A007306801 18,856
E - 72
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
47.076 Education and Human Resources NDSU Clemson University 1882-206-2011602 12,557 3,973
47.076 Education and Human Resources NDSU Missouri University of Science &Technology 0052875 9,050
47.076 Education and Human Resources NDSU Salish Kootenai College NDSU-18-01 76
47.076 Education and Human Resources NDSU Salish Kootenai College NDSU-18-2 4,718
47.079 Office of International Science and Engineering NDSU University of South Alabama A19-0039-S001 16,302
Total for Research & Development Cluster $ 12,789,525 $ 1,356,942
Total For National Science Foundation $ 13,041,243 $ 1,356,942
Nuclear Regulatory Commission
Unclustered
Direct Programs:
77.008 U.S. Nuclear Regulatory Commission Scholarship and BSC $ 50,015 $
Fellowship Program
Total for Unclustered $ 50,015 $
Total For Nuclear Regulatory Commission $ 50,015 $
Small Business Administration
Unclustered
Direct Programs:
59.037 Small Business Development Centers UND $ 677,050 $ 61,076
59.044 Veterans Outreach Program UND 245,510
59.058 Federal and State Technology Partnership Program UND 37,446
Total for Unclustered $ 960,006 $ 61,076
Total For Small Business Administration $ 960,006 $ 61,076
Social Security Administration
Unclustered
Direct Programs:
96.009 Social Security State Grants for Work Incentives Assistance to 36000 $ 147,681 $
Disabled Beneficiaries
Total for Unclustered $ 147,681 $
E - 73
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Disability Insurance/SSI Cluster
Direct Programs:
96.001 Social Security Disability Insurance 32500 $ 3,117,545 $
Total for Disability Insurance/SSI Cluster $ 3,117,545 $
Total For Social Security Administration $ 3,265,226 $
U.S. Department Of Agriculture
Unclustered
Direct Programs:
10.001 Agricultural Research Basic and Applied Research NDSU $ 43,808 $
10.025 Plant and Animal Disease, Pest Control, and Animal Care 60200 363,734
10.025 Plant and Animal Disease, Pest Control, and Animal Care NDSU 136,971
10.153 Market News 60200 10,500
10.162 Inspection Grading and Standardization 60200 344
10.163 Market Protection and Promotion 60200 12,000
10.168 Farmers Market Promotion Program MISUB 8,036
10.170 Specialty Crop Block Grant Program - Farm Bill 60200 2,190,945 448,781
10.171 Organic Certification Cost Share Programs 60200 104,092 70,321
10.178 Trade Mitigation Program Eligible Recipient Agency 20100 8,636
Operational Funds
10.215 Sustainable Agriculture Research and Education MISUB 60,267
10.310 Agriculture and Food Research Initiative (AFRI) NDSU 48,640
10.326 Capacity Building for Non-Land Grant Colleges of Agriculture DSU 150,687
(NLGCA)
10.328 National Food Safety Training, Education, Extension, MISUB 12,421
Outreach, and Technical Assistance Competitive Grants
Program
10.329 Crop Protection and Pest Management Competitive Grants NDSU 153,759
Program
10.351 Rural Business Development Grant BSC 30,187
10.351 Rural Business Development Grant MISUB 1,608
10.435 State Mediation Grants 60200 66,722
E - 74
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.475 Cooperative Agreements with States for Intrastate Meat and 60200 455,351
Poultry Inspection
10.477 Meat, Poultry, and Egg Products Inspection 60200 83,209
10.500 Cooperative Extension Service NDSU 326,820
10.534 CACFP Meal Service Training Grants 20100 17,611 7,161
10.537 Supplemental Nutrition Assistance Program (SNAP) 32500 720
Employment and Training (E&T) Data and Technical
Assistance Grants
10.557 WIC Special Supplemental Nutrition Program for Women, 30100 10,257,580 3,508,902
Infants, and Children
10.558 Child and Adult Care Food Program 20100 9,706,378 9,333,371
10.560 State Administrative Expenses for Child Nutrition 20100 1,743,916 263,516
10.567 Food Distribution Program on Indian Reservations 20100 1,353,670 926,752
10.574 Team Nutrition Grants 20100 17,649 17,649
10.575 Farm to School Grant Program 20100 41,921 41,921
10.578 WIC Grants To States (WGS) 30100 114,933 4,835
10.579 Child Nutrition Discretionary Grants Limited Availability 20100 209,683 111,008
10.582 Fresh Fruit and Vegetable Program 20100 1,752,089 1,684,817
10.664 Cooperative Forestry Assistance NDSU 1,531,158 330,845
10.680 Forest Health Protection 60200 40,813 36,557
10.691 Good Neighbor Authority NDSU 99,836
10.697 State & Private Forestry Hazardous Fuel Reduction Program NDSU 82,557
10.761 Technical Assistance and Training Grants MISUB 12,123
10.773 Rural Business Opportunity Grants MISUB 52,734
10.902 Soil and Water Conservation 72000 230,349
10.902 Soil and Water Conservation 60200 31,217 16,799
10.902 Soil and Water Conservation NDSU 72,693
10.950 Agricultural Statistics Reports NDSU 20,000
10.962 Cochran Fellowship Program-International Training-Foreign NDSU 26,991
Participant
E - 75
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Nonmonetary Assistance:
10.475 Cooperative Agreements with States for Intrastate Meat and 60200 $ 5,737 $
Poultry Inspection
10.567 Food Distribution Program on Indian Reservations 20100 4,101,354 4,101,354
Pass Through Non-State Entity:
10.001 Agricultural Research Basic and Applied Research NDSU South Dakota State University 3TR612 $ 8,782 $
10.215 Sustainable Agriculture Research and Education NDSCS Northcentral Technical College 201910-08-02 3,524
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H004403717 9,753
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H004991239 67,003
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H005722933 4,511
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007179302 11,142
10.227 1994 Institutions Research Program NDSU Nueta Hidatsa Sahnish College N/A 10,781
10.304 Homeland Security Agricultural NDSU Kansas State University S17046 24,691
10.310 Agriculture and Food Research Initiative (AFRI) NDSU North Carolina State University 2015-0097-12 3,745
10.329 Crop Protection and Pest Management Competitive Grants NDSU University of Illinois, Urbana Champaign 076332-15430 16,601
Program
10.329 Crop Protection and Pest Management Competitive Grants NDSU University of Illinois, Urbana Champaign 076332-15436 19,518
Program
10.329 Crop Protection and Pest Management Competitive Grants NDSU University of Illinois, Urbana Champaign 076332-16658 6,029
Program
10.331 Food Insecurity Nutrition Incentive Grants Program NDSU South Dakota State University 3TB548 1,074
10.351 Rural Business Development Grant NDSU Spirit Lake Nation N/A 6,781
10.500 Cooperative Extension Service NDSU Auburn University 18-CHS-205205-NDSU 85,938 36,257
10.500 Cooperative Extension Service NDSU Kansas State University S17117 13,158
10.500 Cooperative Extension Service NDSU Kansas State University S19103 13,320
10.500 Cooperative Extension Service NDSU South Dakota State University 3TB319 36,485
10.500 Cooperative Extension Service NDSU South Dakota State University N/A 12,668
10.500 Cooperative Extension Service NDSU University of Minnesota CPS#0001608811 329,595
10.912 Environmental Quality Incentives Program NDSU University of Wisconsin Madison PO#0000001235 11,416
Total for Unclustered $ 36,488,964 $ 20,940,846
E - 76
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
Unclustered
Direct Programs:
10.U01 Curation of Artifacts 70100 18-CS-11011800-021 & 18- $ 2,781 $
PA-11011800-021
10.U04 Celebrating the 50th Anniversary of NHPA 70100 16-CS-11011800-019 988
10.U05 Highway Hub of History Pilot Project 70100 08-CS-11011800-030 4,666
Pass Through Non-State Entity:
10.U07 ND / SD Extension Gerontology Specialist Position NDSU South Dakota State University 3CES25 $ 22,850 $
Total for Unclustered $ 31,285 $
Child Nutrition Cluster
Direct Programs:
10.553 School Breakfast Program 20100 $ 6,088,057 $ 6,033,770
10.555 National School Lunch Program 20100 21,877,495 21,779,989
10.556 Special Milk Program for Children 20100 24,546 24,546
10.559 Summer Food Service Program for Children 20100 1,028,928 948,266
Nonmonetary Assistance:
10.555 National School Lunch Program 20100 $ 5,031,948 $ 5,031,948
10.559 Summer Food Service Program for Children 20100 6,720 6,720
Total for Child Nutrition Cluster $ 34,057,694 $ 33,825,239
Food Distribution Cluster
Direct Programs:
10.565 Commodity Supplemental Food Program 20100 $ 223,112 $ 167,495
10.568 Emergency Food Assistance Program (Administrative Costs) 20100 250,679 130,857
Nonmonetary Assistance:
10.565 Commodity Supplemental Food Program 20100 $ 459,925 $ 459,925
10.569 Emergency Food Assistance Program (Food Commodities) 20100 1,958,174 1,958,174
Total for Food Distribution Cluster $ 2,891,890 $ 2,716,451
Forest Service Schools and Roads Cluster
Direct Programs:
10.665 Schools and Roads - Grants to States 12000 $ 462 $ 462
E - 77
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.U02 USDA Forest Service Cost Share Challenge VCSU 16-CS-11011800-016 17,447
10.U03 USDA Forest Service Cost Share Challenge VCSU 17-CS-11011800-017 5,275
10.U06 USDA Forest Service Cost Share Challenge VCSU 17-CS-11011800-016 6,829
Total for Forest Service Schools and Roads Cluster $ 30,013 $ 462
Research & Development Cluster
Direct Programs:
10.001 Agricultural Research Basic and Applied Research NDSU $ 2,702,175 $
10.001 Agricultural Research Basic and Applied Research UND 1,868,928
10.025 Plant and Animal Disease, Pest Control, and Animal Care NDSU 84,708
10.028 Wildlife Services NDSU 119,432
10.028 Wildlife Services UND 3,224
10.167 Transportation Services NDSU 148,430
10.200 Grants for Agricultural Research, Special Research Grants NDSU 75,331 275
10.202 Cooperative Forestry Research NDSU 93,771
10.203 Payments to Agricultural Experiment Stations Under the Hatch NDSU 2,453,328
Act
10.207 Animal Health and Disease Research NDSU 44,569
10.310 Agriculture and Food Research Initiative (AFRI) NDSU 1,360,538 279,500
10.310 Agriculture and Food Research Initiative (AFRI) UND 124,897
10.500 Cooperative Extension Service NDSU 2,437,828
10.664 Cooperative Forestry Assistance NDSU 61,880
10.903 Soil Survey NDSU 20,926
10.912 Environmental Quality Incentives Program NDSU 79,245 37,271
10.924 Conservation Stewardship Program NDSU 38,200
10.932 Regional Conservation Partnership Program UND 17,615
Pass Through Non-State Entity:
10.001 Agricultural Research Basic and Applied Research NDSU University of Nebraska-Lincoln 25-6235-0275-002 $ 1,500 $
10.163 Market Protection and Promotion NDSU American Sheep Industry Association N/A 8,690
10.170 Specialty Crop Block Grant Program - Farm Bill NDSU National Sunflower Association 17-357 72,295
10.170 Specialty Crop Block Grant Program - Farm Bill NDSU USA Dry Pea & Lentil Council N/A 3,807
E - 78
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University PO 388158 15,162
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University PO 388637 12,490
10.200 Grants for Agricultural Research, Special Research Grants NDSU Michigan State University RC106511C 165,711
10.215 Sustainable Agriculture Research and Education NDSU South Dakota State University 3TB473 163
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H005722909 52,323
10.215 Sustainable Agriculture Research and Education NDSU University of Minnesota H007179324 5,128
10.227 1994 Institutions Research Program NDSU United Tribes Technical College N/A 3,214
10.303 Integrated Programs NDSU Michigan State University RC108938NDSU 4,177
10.303 Integrated Programs NDSU University of Wisconsin Madison 855K326 3,367
10.307 Organic Agriculture Research and Extension Initiative NDSU Montana State University G193-19-W7408 4,047
10.309 Specialty Crop Research Initiative NDSU Colorado State University G-01363-02 94,906
10.309 Specialty Crop Research Initiative NDSU Cornell University 73999-10419 370,498
10.309 Specialty Crop Research Initiative NDSU Montana State University G102-20-W7553 2,821
10.309 Specialty Crop Research Initiative NDSU University of Minnesota H007082504 15,135
10.310 Agriculture and Food Research Initiative (AFRI) NDSU Kansas State University S19134 8,626
10.310 Agriculture and Food Research Initiative (AFRI) NDSU Purdue University F9002711902004 68,277
10.310 Agriculture and Food Research Initiative (AFRI) NDSU South Dakota State University 3TB455 5,285
10.310 Agriculture and Food Research Initiative (AFRI) NDSU South Dakota State University 3TB821 28,316
10.310 Agriculture and Food Research Initiative (AFRI) NDSU South Dakota State University 3TB828 6,589
10.310 Agriculture and Food Research Initiative (AFRI) NDSU University of Connecticut 174365 7,103
10.320 Sun Grant Program NDSU South Dakota State University 3TK640 67,766 26,736
10.320 Sun Grant Program NDSU South Dakota State University 3TL640 80,768 27,230
10.320 Sun Grant Program NDSU South Dakota State University 3TS640 30,848
10.329 Crop Protection and Pest Management Competitive Grants NDSU Michigan State University RC108974G 1,022
Program
10.902 Soil and Water Conservation NDSU Red River Basin Commission N/A 23,524
10.903 Soil Survey NDSU Purdue University 8000083094-AG 178
10.924 Conservation Stewardship Program NDSU Turtle Mountain Community College NR186633XXXXG006 6,400
Total for Research & Development Cluster $ 12,905,161 $ 371,012
E - 79
STATE OF NORTH DAKOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2019
CFDA STATE IDENTIFYING AMOUNT TO
NUMBER PROGRAM TITLE AGENCY PASS THROUGH ENTITY NUMBER EXPENDITURES SUBRECIPIENTS
SNAP Cluster
Direct Programs:
10.551 Supplemental Nutrition Assistance Program 32500 $ 64,823,362 $
10.561 State Administrative Matching Grants for the Supplemental 32500 10,957,937 52,134
Nutrition Assistance Program
Total for SNAP Cluster $ 75,781,299 $ 52,134
Total For U.S. Department Of Agriculture $ 162,186,306 $ 57,906,144
U.S. Election Assistance Commission
Unclustered
Direct Programs:
90.401 Help America Vote Act Requirements Payments 10800 $ 195,306 $
Total for Unclustered $ 195,306 $
Total For U.S. Election Assistance Commission $ 195,306 $
United States Agency For International Development
Research & Development Cluster
Pass Through Non-State Entity:
98.001 USAID Foreign Assistance for Programs Overseas NDSU Pennsylvania State University 4932-NDSU-AID-0077 $ 172,357 $ 11,360
98.001 USAID Foreign Assistance for Programs Overseas NDSU The National Academies 200008308 88,634
98.RD A Sustainable Point-of-use Filtration Unit for Treating NDSU The National Academies of Sciences, 2000006097 18,580
Engineering, and Medicine
Total for Research & Development Cluster $ 279,571 $ 11,360
Total For United States Agency For International Development $ 279,571 $ 11,360
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,125,635,580 $ 303,228,056
E - 80
STATE OF NORTH DAKOTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Years Ended June 30, 2020 and 2019
NOTE 1. PURPOSE OF THE SCHEDULE
The Schedule of Expenditures of Federal Awards (Schedule) is a supplementary schedule to the
State’s basic financial statements (BFS) and is presented for the purposes of additional analysis.
The Schedule is required by Office of Management and Budget (OMB) Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Presentation
Federal Financial Assistance – Pursuant to the Single Audit Act of 1984 (Public Law 98-502),
the Single Audit Act Amendments of 1996 (Public Law 104-156), and OMB Uniform Guidance,
federal financial assistance is defined as assistance provided by a federal agency, either directly
or indirectly, that non-federal entities receive or administer, in the form of grants, contracts,
cooperative agreements, loans, loan guarantees, property interest subsidies, insurance, or
direct appropriations. Accordingly, nonmonetary federal assistance, including food
commodities, food stamps, vaccines, and donated surplus property is included in federal
financial assistance and, therefore, is reported on the Schedule. Federal financial assistance
does not include direct federal cash assistance to individuals. Contracts between the state and
federal government for which the federal government procures tangible goods or services are
not considered to be federal financial assistance.
Catalog of Federal Domestic Assistance – Uniform Guidance requires the Schedule to show the
total expenditures for each of the State’s federal financial assistance programs as identified in the
Catalog of Federal Domestic Assistance (CFDA). The CFDA is a government-wide compendium
of individual federal programs.
Each program included in the CFDA is assigned a five-digit program identification number (CFDA
number), the first two digits designate the federal agency and the last three digits designate
the federal assistance program within the federal agency.
Federal financial assistance programs that have not been assigned a CFDA number are indicated
using the federal agency’s two digit code as the prefix and using a “U” followed by a two-digit
number (e.g., U01, U02, etc.) for the last three digits. If the Federal program is part of the
Research and Development (R&D) cluster, “RD” is used as the CFDA extension.
Clusters of Programs – Closely related programs with different CFDA numbers that share
common compliance requirements are to be considered a cluster of programs. The only program
clusters presented on the Schedule are those mandated by OMB in the 2 CFR Part 200, Appendix
XI, Compliance Supplement.
E - 81
STATE OF NORTH DAKOTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Years Ended June 30, 2020 and 2019
B. Type A and Type B Programs
The Uniform Guidance establishes the levels of expenditures to be used in defining Type A and
Type B federal financial assistance programs. Type A assistance programs for the State of North
Dakota are those programs that exceeded $13,255,999 in federal expenditures, distributions, or
issuances for the two-year period ended June 30, 2020.
C. Reporting Entity
The Schedule includes all federal financial assistance programs administered by those State
departments and entities included in the State’s Comprehensive Annual Financial Report, except
the departments audited by independent public accounting firms that file their own single audit
with the federal clearinghouse. The departments not included in the Schedule are: Housing
Finance Authority, Bank of North Dakota, Job Service North Dakota, and Public Finance Authority.
D. Basis of Accounting
Federal financial assistance expenditures included in the Schedule are reported using the
modified accrual basis of accounting, except for the following: colleges, universities, and
enterprise entities reported expenditures on the accrual basis; the Department of Public
Instruction, Division of Emergency Services, Secretary of State, Information Technology
Department, Insurance Department, State Historical Society, Council on the Arts, Attorney
General’s Office, State Auditor’s Office, Industrial Commission, Department of Labor, School for
the Blind, State Water Commission, State Treasurer, Governor’s Office, Office of Management
and Budget, and the Department of Human Services reported expenditures on the cash basis;
and the Health Department reported expenditures on the cash basis plus accrued payroll and
accrued indirect costs.
Indirect Costs – The State has elected not to use the 10% de minimis indirect cost rate allowed
under the Uniform Guidance except for the following three agencies:
Department of Veterans Affairs
Aeronautics Commission
State Auditor’s Office (2020)
Valley City State University
Matching Costs – The Schedule does not include matching expenditures.
Nonmonetary Assistance – The Schedule contains values for several nonmonetary assistance
programs. The Commodities and Vaccine programs are presented at the federally assigned
values of the products distributed by the state. The Surplus Property program is presented at the
fair market value of property received. The fair market value was estimated to be 23.34% of the
property’s original federal acquisition value.
E - 82
STATE OF NORTH DAKOTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Years Ended June 30, 2020 and 2019
Loan and Loan Guarantee Programs – Information on federal loan and federal loan guarantee
programs is included in the Notes to the Schedule instead of on the Schedule itself.
Federal Transactions Between State Entities – Some state entities transfer federal assistance to
other state entities (i.e., a pass-through of funds by the primary recipient state entity to a
subrecipient state entity). In this case, the expenditures are recognized by the primary state entity
on the Schedule of Expenditures of Federal Awards. Purchases of services between state entities
using federal moneys are reported as expenditures by the purchasing entity and as revenues for
services rendered by the providing entity.
Supplemental Nutrition Assistance Program (SNAP) Expenditures – The Supplemental Nutrition
Assistance Program (SNAP) is presented at the dollar value of food stamp electronic benefit
transfers authorized and used by recipients.
Negative amounts shown on the Schedule represent adjustments or credits made in the normal
course of business to amounts reported as expenditures in prior years.
NOTE 3. NONMONETARY ASSISTANCE INVENTORY
As described previously in Note 2, nonmonetary assistance is reported in the Schedule based on
the amount disbursed. At June 30, 2020 and 2019, the inventory balances of nonmonetary
assistance were as follows:
Nonmonetary Assistance June 30, 2019 June 30, 2020
Food Commodities $ 1,425,573 $ 1,496,645
Donated Surplus Property 2,481,853 2,315,585
Vaccines 3,081,065 5,092,070
Total Inventory Balance $ 6,988,491 $ 8,904,300
NOTE 4. LOAN PROGRAMS
The state administers two loan programs with continuing compliance requirements other than
Student Financial Aid. At June 30, 2020 and 2019, the amount of loans receivable for each loan
program were as follows:
Loan Program CFDA # FY19 FY20
Community Development Block Grants/State's Program 14.228 $ 1,502,969 $ 1,662,077
HOME Investment Partnerships Program 14.239 8,560,637 9,690,186
Total Loans Receivable $ 10,063,606 $ 11,352,263
E - 83
STATE OF NORTH DAKOTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Years Ended June 30, 2020 and 2019
NOTE 5. STUDENT FINANCIAL AID PROGRAMS
Expenditures as included on the Schedule of Expenditures of Federal Awards for student financial
assistance programs include refunds to grantors, administrative expenses, collection costs,
litigation costs, etc.
Advances to students, loans receivable, and federal capital contributions for applicable loan
programs for the fiscal years ended June 30, 2020 and 2019 are identified below:
Student Financial Aid Program CFDA # FY19 FY20
Loan Advances:
Federal Direct Student Loans 84.268 $ 161,272,912 $ 161,331,786
Nurse Faculty Loan Program (NFLP) 93.264 23,432 10,492
Health Professions Student Loans, Including Primary
Care Loans/Loans for Disadvantaged Students 93.342 34,500 60,100
Nursing Student Loans 93.364 569,123 478,315
Total Loan Advances $ 161,899,967 $ 161,880,693
Loans Receivable:
Federal Perkins Loan Program 84.038 $ 25,803,731 $ 20,391,605
Nurse Faculty Loan Program (NFLP) 93.264 108,934 113,960
Health Professions Student Loans, Including Primary
Care Loans/Loans for Disadvantaged Students 93.342 390,996 257,991
Nursing Student Loans 93.364 2,586,530 2,488,563
Total Loans Receivable $ 28,890,191 $ 23,252,119
Loan advances represent new loans made directly by the institution for the Perkins, Nursing, and
Health Professions loan programs. The colleges and universities are responsible for completing
portions of the loan application, verifying student eligibility, filing enrollment verification reports,
refunding money to lenders, and disbursing loan checks received from the lending institutions for
Federal Family Education Loans.
Loans receivable are shown at gross and are derived from the financial records of the applicable
college or university.
E - 84
NORTH
Management
Dakota I Be Legendary."
and Budget
March 1, 2021
Mr. Josh Gallion
State Auditor
600 E Boulevard Avenue, Dept. 117
Bismarck, ND 58505
Dear M r. Gallion:
In accordance with Uniform Guidance requirements, we have prepared the accompanying corrective
action plans. For each finding, we are providing you with the contact people responsible for corrective
action, the corrective action planned, and the anticipated completion date.
Sincerely,
Jeff Larsh us
Director of State Financial Services
600 E Boulevard Ave, Dept 110 Bismarck, ND 58505-0400 I nd.gov/omb
DIRECTOR CENTRAL FACILITY FISCAL HUMAN RESOURCE RISK
& ADMINISTRATION SERVICES MANAGEMEN T MANAGEMENT MANAGEMENT SERVICES MANAGEMENT
1600 E Cenlury Ave, Su,le 4
4th Floor 14th Floor 4th Floor 4th Floor 14th Floor Bismarck, ND 58503
701 .328.4904 701.328.3293 701.328.2471 701.328.2680 701 .328.3293 701 .328.7584
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
FINANCIAL STATEMENT FINDINGS
Office of Management and Budget
Finding: F19-1
Office of Management and Budget Response/Corrective Action Plan: Although we agree with
the auditors that the two disclosures were inadvertently not included in the notes to the financial
statements and subsequently added after being brought to our attention, we do not feel the missing
disclosures qualitatively affect the user’s ability to understand the State’s financial position and results
of operation. Furthermore, we do not agree that the missing note disclosures constitute a significant
deficiency in internal controls. OMB will continue to work with the component units and their auditor
reports to ensure all necessary note disclosures are included in the CAFR.
Contact Person: Rachel Kmetz, Accounting Manager, Fiscal Management Division
Anticipated Completion Date: June 30, 2020
Auditor’s Concluding Remarks: Annually, the Office of Management and Budget identifies in the CAFR
the new GASB pronouncements that have been implemented including GASB 62 and GASB 88. Lack of
procedures for including required disclosures resulted in incomplete application of the GASB
pronouncements and failure to provide essential information related to debt to taxpayers, public
officials, and others who use the CAFR and accompanying notes.
Office of Management and Budget
Finding: F20-1
Office of Management and Budget Response/Corrective Action Plan: OMB agrees with the
recommendation. OMB will work with the Department of Transportation to ensure they are capitalizing
and depreciating infrastructure projects timely after the project is substantially complete according to
current policies.
Contact Person: Rachel Kmetz, Accounting Manager, Fiscal Management Division
Anticipated Completion Date: June 30, 2021
F - 2 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
NOR TH
Da ota I Commerce
Be Legenda ry.N
February 9, 2021
Joshua C. Gallion
State Auditor
600 E Boulevard Ave
Bismarck, ND 58505
Dear Mr. Gallion,
We have prepared the accompanying correction action plan as required by the
standards
applicable to financial audits containe d in the Govern ment Auditing Standar ds
and by the audit
requirem ents of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Adminis
trative
Require ments, Cost Principles, and Audit Require ments for Federal Awards . Specifica
lly, for the
finding we are providin g you with our responsible officials' views, the name of
the contact
person respons ible for corrective action, the correcti ve action planned , and the
anticipa ted
complet ion date.
Sincerely,
Celeste Engelhard
Lead Fiscal Officer
1600 E Century Avenue, Suile 2 I P.O. Box 2057 I Bismarck, ND 58502-2057
PHONE: 701• 328 • 5300
I ro ll · FREE· l -866-4DAK OTA I ND RELAY TTY: l -800-366- 68 88 I VOICE: l -800-366- 6889 NDCommerce.com
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Department of Commerce
Finding: 2020-001
Department of Commerce Response/Corrective Action Plan: The Department of Commerce
agrees with the recommendation and will ensure accurate preparation of the Schedule of Expenditures
of Federal Awards and the schedule will be reviewed by the Lead Fiscal Officer before being submitted.
Contact Person: Celeste Engelhard, Lead Fiscal Officer
Anticipated Completion Date: We immediately put our corrective action plan into place. The 2020 SEFA
was completed and reviewed before being submitted to the Office of Management and Budget.
F - 4 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
NOR T H
Dakota I Human Services
Be Legendary.~
March 1, 2021
Josh Gallion
State Auditor
600 E Boulevard Ave Dept 117
Bismarck, ND 58505
Dear Mr. Gallion:
We have prepared the accompanying corrective action plan as required by the standards applicable
to financial audits contained in Government Auditing Standards and by the audit requirements of
Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards. Specifically, for each finding we are
providing you with our responsible officials’ views, the names of the contact people responsible for
the corrective action, the corrective action planned, and the anticipated completion date.
Sincerely,
c
Christopher D. Jones
Executive Director
Cc: Jacqueline Ressler
EXECUTIVE OFFICE
G O VERNOR EXECUT I VE DI RECTO R
Doug Burgum Christopher Jones
600 E Boulevard Ave Dept 325 | Bismarck ND 58505-0250 | 701.328.2538 | 800.472.2622 | 711 (TTY)
www.nd.gov/dhs
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Department of Human Services
Finding: 2020-002
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The Medicaid Policy Unit has implemented ELearning training
that is mandatory for all Medicaid Eligibility Workers.
• The Training Modules are as follows:
• Electronic Data Sources
• Documentation & Narratives
• Common Eligibility Errors: Income
• Common Eligibility Errors: Household Composition
• Non-ACA Reviews
• TPL
The system error related to Defect 158460 has since been implemented which fixed the issue in SPACES.
The PaSS Unit provides ongoing training for eligibility workers.
Contact Person: Joyce Johnson, Medical Policy Director and Juli Johnson, Medicaid Policy Administrator
Anticipated Completion Date: Completed
F - 6 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-003
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services (DHS) agrees with the recommendation. DHS has now filled the vacant Medicaid Accountant
position. This position will be responsible to complete the administrative portion of the Quarterly
Children’s Health Insurance Program Statement of Expenditures for Title XXI report (CMS-21
Report). Part of the quarterly reporting process will be to reconcile the amounts reported to PeopleSoft,
as the PeopleSoft system is the system of record for DHS administrative expenses. As noted above DHS
did not perform the reconciliation’s timely due to turnover in staff but reconciliations were provided
once requested and no errors were noted. DHS anticipates reconciliation’s will be done timely since the
position has been filled.
The Medical Assistance expenditures reported on the Quarterly Statement of Expenditures for the
Medical Assistance Program (MAP) (CMS-64 Report) are based on payment data from MMIS. This data
is summarized and grouped according to CMS reporting requirements. MAP expenditure data at this
detail does not exist in PeopleSoft, therefore the PeopleSoft system is not used for federal reporting,
however part of the federal reporting process includes balancing PeopleSoft check write amounts to
MMIS 64 reports generated from MMIS.
DHS wishes to clarify that there is not a risk of federal reporting being inaccurate for the MAP if
reconciliations between the federal report and PeopleSoft are not completed. MMIS is the system of
record for federal reporting and calculations for collection adjustment are part of the federal reporting
process and can only made in PeopleSoft once the federal reporting process is complete. DHS will
ensure timely adjustments are made to PeopleSoft to ensure MAP expenditure amounts reported on
the CMS-64 are properly reflected in PeopleSoft, this will also ensure that fiscal year-end financial
reporting is reflective of what has been reported, and therefore reduce the risk of misstatement on the
Schedule of Expenditures of Federal Awards.
Contact Person: Rhonda Obrigewitch, Assistant CFO
Anticipated Completion Date: September 2021
F - 7 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-004
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The Department will implement additional editing in MMIS
during the claim adjudication process prior to claims payment to enhance the identification of potential
duplicate payments. During the next year, the Department will review at least quarterly whether
additional editing may be necessary to enhance the identification of potential duplicate payments.
Contact Person: Caprice Knapp, Medicaid Director
Anticipated Completion Date: March 31, 2022
Finding: 2020-005
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The Department will provide education to providers on the
requirement to retain documentation to support the services billed. The Department will also provide
education to providers on the necessity to provide the requested documentation for a records request.
Contact Person: Caprice Knapp, Medicaid Director
Anticipated Completion Date: June 30, 2021
F - 8 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-006
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The Program Integrity Unit has revised the language in the
Audit Overview Oversight document to better reflect the new rehabilitation provider process. It is not a
formal audit but rather an educational review process meant to assist the providers in billing correctly.
The Program Integrity Unit has reassigned the layperson ambulance reviews to the Utilization Review
team due to no longer having a layperson in the PIU. The PIU will pull the applicable claims data for the
UR team to conduct the review. Prior to reassigning to the UR team, a temporary enrollment staff
helped get the late ambulance claim reviews caught up. Requests for the sample of ambulance claims
for 4th quarter 2020 went out and we are currently receiving responses and are current with the
reviews. The semi-annual recipient analysis for first half of 2020 was completed in October of 2020. The
second half of 2020 will be reviewed this month.
Due to the declaration of the Public Health Emergency as of March 2020, State Medicaid Agencies were
encouraged to halt auditing to allow healthcare facilities to focus on treating patients associated with
the pandemic.
Contact Person: Dawn Mock, Medicaid Program Integrity Administrator
Anticipated Completion Date: Completed
Finding: 2020-007
Department of Human Services Response/Corrective Action Plan: The Department agrees with
the recommendation and will sign an amendment to the Cotiviti contract which will meet the
requirements of the confidentiality agreement in Section 7.1.2 of the Medicaid National Correct Coding
Initiative Technical Guidance Manual, revised 01/01/2020.
Contact Person: Caprice Knapp, Medicaid Director
Anticipated Completion Date: March 2021
F - 9 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-008
Department of Human Services Response/Corrective Action Plan: The Department agrees with
the recommendation. The Department’s Program will continue to request a SOC audit from HMS.
Contact Person: Cody Hedge, Paralegal at Child Support
Anticipated Completion Date: January 2021
Finding: 2020-009
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. Early Childhood Services has received Technical Assistance
from the regional office (OCC) regarding childcare records. Their recommendations according to CCDF
requirements, were to update our compliance checklist (see below) and to eliminate the childcare
record (SFN 1426) which is not a required form. All specialists will be using the updated compliance
checklist by May of 2021.
CHILD CARE RECORDS WORKSHEET
Review of no less than 30 files must be conducted on site. If the abbreviated review reveals incomplete
records, an additional 30 files must be reviewed. This process will continue, 30 files at a time, until no
incomplete records are found or until all files have been reviewed.
For facilities will less than 30 children enrolled, all files will be reviewed.
Records Age Group Last Names From:
Reviewed Reviewed:
30 All
Insert Add Row
Button Here
Contact Person: Carmen Traeholt, Early Childhood Services Statewide Manager
Anticipated Completion Date: May 2021
F - 10 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-010
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The State initiated a process redesign for early childhood
licensing in August 2019. The redesign was intended to improve consistency of reviews, ongoing
monitoring, and corrective action across all 19 Human Service Zones. The bulk of the redesign work took
place in advance of the former county-employed early childhood licensors becoming state employees
(January 2020).
As part of Redesign, DHS piloted the use of a streamlined on-site visit checklist to identify opportunities
for efficiencies. Thirteen counties utilized the abbreviated form during pilot, the remaining counties
continued to utilize the existing form. It was determined that the abbreviated form would not
adequately capture information needed so, in June 2020 all licensors reverted to utilization of the full-
length Compliance Checklist to assure all Health and Safety standards are being met.
In September 2020 DHS began the work of implementing a comprehensive Early Childhood Licensing
database that will greatly improve the ability to properly license providers. The system is anticipated to
be complete by March 2022.
Contact Person: Carmen Traeholt, Early Childhood Services Statewide Manager
Anticipated Completion Date: March 2022
Finding: 2020-011
Department of Human Services Response/Corrective Action Plan: The Department agrees with the
recommendation. During the audit timeframe, County Licensors were inconsistent in how they followed
up on corrective orders. As part of Early Childhood Services Redesign (completed by March 2020), all
Licensing Specialists are assigned a specific provider case load, which will help Licensing Specialists keep
track of any correction orders and follow-up expectations that affect providers they are assigned to
work with.
Contact Person: Carmen Traeholt, Early Childhood Services Statewide Manager
Anticipated Completion Date: March 2021
F - 11 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-012
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The Lead Agency receives a monthly report that contains
payments that could be considered duplicate that were made for three months prior to the current
month. The report contains payments that meet the following criteria:
• Same child
• Same caretaker
• Same provider
• Same service month
Department staff reviews identified payments on this report and maintains a log and notes on each
situation and any follow up that was completed with Eligibility workers.
The consolidated eligibility system, SPACES, where payments are issued, does have checks validations in
place to ensure payments to no exceed the state maximum rate. An additional warning message is in
place and is received when a payment already exists for the child and provider for a service month and a
new payment with the same criteria is entered. Workers are able to by-pass this warning message as
there are instances where a second payment may be needed. The department will explore a system
enhancement to make this warning message more prominent in an effort to reduce duplicate payment
situations.
Contact Person: Emily Hakanson, Child Care Assistance Program Administrator
Anticipated Completion Date: There is no anticipated completion date for system enhancements as all
enhancements have to be prioritized and scheduled based on need.
F - 12 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-013
Department of Human Services Response/Corrective Action Plan: The Department agrees with
the recommendation. DHS provides policy and system trainings, tips and tricks and policy and processing
reminders as needed through periodic statewide trainings, monthly newsletters and online help
resources. This effort is done in collaboration with the Policy and System Support (PaSS) unit in
Economic Assistance. The PaSS unit will begin conducting CCAP New Worker Training annually beginning
the winter of 2022. The training will cover all aspects of CCAP eligibility.
In March 2019, the department implemented a new eligibility system, SPACES. The implementation of
this new system has made processing of cases less error prone as the system calculates all aspects of
CCAP eligibility such as countable income amounts, countable households members, allowable child
care hours, etc. The department is continually making improvements to the system through change
requests.
Quality Assurance reviews are completed monthly and the results of those reviews are used to
determine training needs, corrective active, etc. to mitigate errors.
Contact Person: Emily Hakanson, Child Care Assistance Program Administrator
Anticipated Completion Date: CCAP New Worker training will begin annually starting winter 2022.
System enhancements and other trainings, reminders, etc. are completed as needed.
F - 13 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-014
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. The State initiated a process redesign for early childhood
licensing in August 2019. The redesign was intended to improve consistency of reviews, ongoing
monitoring, and corrective action across all 19 Human Service Zones. The bulk of the redesign work took
place in advance of the former county-employed early childhood licensors becoming state employees
(January 2020).
As part of Redesign, DHS piloted the use of a streamlined on-site visit checklist to identify opportunities
for efficiencies. Thirteen counties utilized the abbreviated form during pilot (August 2019 – March
2020); the remaining counties continued to utilize the existing form. It was determined that the
abbreviated form would not adequately capture information needed so, in August 2020 all licensors
reverted to utilization of the full-length Compliance Checklist to assure all Health and Safety standards
are being met.
As part of North Dakota’s regular federal review, the current compliance checklist was reviewed by
Regional OCS and all recommendations will be implemented in May 2021.
Contact Person: Carmen Traeholt, Early Childhood Services Statewide Manager
Anticipated Completion Date: May 2021
F - 14 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-015
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with the recommendation. During the audit timeframe County Licensors were
inconsistent in rates of completion for unannounced visits. This was due, in part, to the difference in
how each County chose to administer and staff this function; licensors were not consistently required to
maintain certain caseloads which contributed to uneven application of this part of the regulation.
A major focus of the redesign effort was to ensure that the system was structured to ensure early
childhood specialists time was organized to maximize time spent on visits. As part of redesign all
Licensing Specialists are assigned a specific case load so they can schedule and follow through with
unannounced visits for their assigned providers. This new distribution of work accompanied the
transition from county to state employment (Jan 2020) and was being implemented by mid-2020.
Early Childhood Services is currently in the process of designing a database to ensure all required
documents and licensing visits are complete prior to issuing licenses and certificates to providers. The
data base will be complete in April of 2022.
Contact Person: Carmen Traeholt, Early Childhood Services Statewide Manager
Anticipated Completion Date: April 2022
Finding: 2020-016
Department of Human Services Response/Corrective Action Plan: The Department agrees with
the recommendation. Early Childhood Services Redesign moved all County Licensors to State
employment (Jan 2020) and Early Childhood Services Regional Representatives to a Supervisor status
(March 2020). These steps will change how a QA visit is completed. QA visits starting in 2021 will include
both standard performance reviews of licensors as well as quality assurance review of outputs and
outcomes. This includes review of how licensors conduct visits and complete their core work related to
license compliance and health and safety practices of child care programs.
Contact Person: Carmen Traeholt, Early Childhood Services Statewide Manager
Anticipated Completion Date: June 2021
F - 15 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-017
Department of Human Services Response/Corrective Action Plan: The Department agrees with
the recommendation. DHS acknowledges that due to SPACES implementation, the sampling sent to JOBS
contractors was put on hold and not provided. Effective February 2021, all future Random Sampling
Reports will be sent out monthly.
The following monthly Random Sampling Reports have been provided to the Employment Contractors:
• October, November and December 2019 were provided in May 2020
• April, May and June 2019 were provide in June 2020
• January, February and March 2020 were provided in June 2020
• July, August and September 2019 were provided in August 2020
• April, May and June 2020 were provided in August 2020
• July, August and September 2020 were provided in December 2020
• October and November 2020 were provided on January 4, 2021
• December 2020 will be sent out in February 2021
Contact Person: Joan Schatz, TANF/JOBS Program Administrator
Anticipated Completion Date: February 2021
F - 16 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-018
Department of Human Services Response/Corrective Action Plan: The Department of Human
Services agrees with this recommendation. The Child and Family Services (CFS) policy Foster Care
Eligibility Quality Assurance Reviews 447-10-18 is under revision to accommodate the changes of
eligibility unit implementation and how to apply review for high risk of agencies.
The fiscal office compiles the county/zone risk assessment on a yearly basis. CFS sends NDDHS Fiscal the
required information (results of Foster Care reviews, OCR reviews, etc). The request to take the results
of that combined risk assessment into account when selecting foster care reviews is embedded into the
new draft policy. For example: If a zone is deemed high risk during the risk assessment and is not due for
a file review, the high-risk knowledge will be considered in future sampling.
It is imperative to mention that the North Dakota Department of Human Services, the North Dakota
Association of Counties, and local human service zone leaders, with the support of Gov. Doug Burgum
and state lawmakers continue to redesign social services. This collaborative effort began with the
passage of Senate Bill 2206 in 2017, continued with the passage of Senate Bill 2124 in 2019 and is
currently being heard as Senate Bill 2086 during the 2021 legislative assembly. Due to redesign efforts,
the Centralized Foster Care & Subsidized Adoption Eligibility Unit, absorbed as a function of Children and
Family Services (CFS), went live February 1, 2021. The overall goals are to implement standardized
procedures which offer consistency and efficiencies for workers, providers, and families, while reducing
financial errors and overpayments for the state. The unit will manage the
o Eligibility determinations for foster care cases, while authorizing eligible foster care
payments.
o Eligibility determinations for children seeking prevention services, also known as
candidates for foster care.
o Sub-adopt negotiation process, while authorizing all eligible subsidy payments.
o Opening and closing of ND Medicaid for all foster and sub-adopt cases.
Effective, February 1, 2021 much of the review is about our own NDDHS employees and error rate with
payments or eligibility determinations. However, we will be able to notify the Zones/agencies if they are
not getting information to the unit timely resulting in fiscal error.
Contact Person: Kelsey Bless, Permanency Administrator at Children and Family Services
Anticipated Completion Date: March 2021
F - 17 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-019
Department of Human Services Response/Corrective Action Plan: The Department agrees with
the recommendation. Program Accountant plans on creating a procedure manual for the end of the
period of performance, to identify charges that need to be applied to the appropriate grant year.
Currently there is not written procedure manual or documentation that outlines the steps needed to
ensure proper period of performance.
This procedure manual to be created will outline the steps the Program Accountant needs to take in
order to check all transactions posting to Peoplesoft from the AWARE case management system, check
Peoplesoft speedcharts for both VR central office and the VR regional offices located in the Human
Service Centers, and checking the history database for any errors on to ensure a comprehensive review
of all transactions between the AWARE system and Peoplesoft.
Contact Person: Jacqueline Ressler, Account Manager and Isabel Tischmak, Vocational Rehab Program
Accountant
Anticipated Completion Date: November 30, 2020
F - 18 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
Kirsten Baesler 600 E. Boulevard Ave., Dept. 201
State Superintendent Bismarck, ND 58505-0440
Phone (701) 328-2260
NORTH DAKOTA DEPARTMENT OF Fax (701) 328-2461
PUBLIC INSTRUCTION www.nd.gov/dpi
February 4, 2021
The Honorable Joshua C. Gallion
State Auditor
600 E Boulevard Ave
Bismarck, ND 58505
Dear Mr. Gallion,
We have prepared the accompanying corrective action plan as required by the standards applicable to
financial audits contained in the Government Auditing Standards and by the audit requirements of Title
2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards. Specifically, for each finding we are providing you with our
responsible officials' views, the names of the contact people responsible for corrective action, the
corrective action planned, and the anticipated completion date.
Sincerely,
q
Jamie Mertz
Fiscal Management Director
ND School for the Deaf/RCDHH ND State Library ND Vision Services/School for the Blind
Devils Lake, ND Bismarck, ND Grand Forks, ND
(701) 665-4400 (701) 328-2492 (701) 795-2700
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Department of Public Instruction
Finding: 2020-020
Department of Public Instruction Response/Corrective Action Plan: The Department of Public
Instruction agrees with the recommendation. The Department will review and update procedures for
monitoring the Special Education Cluster.
Contact Person: Jamie Mertz, Fiscal Management Director
Anticipated Completion Date: July 1, 2021
Finding: 2020-021
Department of Public Instruction Response/Corrective Action Plan: The Department of Public
Instruction agrees with the recommendation.
We have reviewed our audit procedures as well as 2 CFR 200 Subpart F. We will be looking possible
ways to utilize a notification system so that deadlines are not missed as well as following up on
outstanding issues.
Contact Person: Jamie Mertz, Fiscal Management Director
Anticipated Completion Date: May 1, 2021
Finding: 2020-022
Department of Public Instruction Response/Corrective Action Plan: The Department of Public
Instruction agrees with the recommendation.
The following additional review and approval has been implemented.
• If the Grant Award Notification is system generated, the agency Fiscal Management Director will
sign off on the Grant Award Notification template before the first one is issued.
• If the Grant Award Notification is manually created, the agency Fiscal Management Director will
sign the form before it is sent to the grantee.
Iii
F - 20 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
We believe this additional approval will eliminate the inconsistencies and errors occurring across the
agency offices when completing these notifications.
Contact Person: Jamie Mertz, Fiscal Management Director
Anticipated Completion Date: Process change was implemented February 2, 2021
Finding: 2020-023
Department of Public Instruction Response/Corrective Action Plan: The Department of Public
Instruction is rewriting internal procedures to ensure that the Child Nutrition Cluster obligations will
occur within the period of performance and payment will not be made after the period of performance.
Contact Person: Linda Schloer, Director of Child Nutrition and Food Programs
Anticipated Completion Date: March 31, 2021
Iii
F - 21 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
NORTH
Dakota I Transportation
Be Legendary.'"
February 25, 2021
Mr. Joshua C. Gallion
State Auditor
Office of the State Auditor's Office
600 E Boulevard Ave - Dept 117
Bismarck ND 58505
Dear Mr. Gallion:
We have prepared the accompanying corrective action plan as required by the.
standards applicable to financial audits contained in the Government Auditing
Standards and by the audit requirements of Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Specifically, for the findings we are providing you
with our responsible officials' view, the name of the contact person responsible for the
corrective action planned, and the anticipated completion date.
Sincerely,
annon L. Sauer, CPA/CGMA
Chief Financial Officer
50/sls/cpm
Enclosure
cc: NDDOT Audit Coordination Committee
Kevin Scherbenske, State Auditor's Office
608 East Boulevard Avenue I Bismarck, ND 58505-0700 I dot.nd.gov VISION
~~
Dcpa,tment ofTtansportatlon
TOLL FREE: 1-855-637-6237 I TTY: 71 l ZER9
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Department of Transportation
Finding: 2020-024
Department of Transportation Response/Corrective Action Plan:
ND DOT agrees with the finding.
Part 1: NDDOT's Quality Assurance & Internal Review Division has implemented a continuous screening
process for subrecipient audit reports and will be working with the program managers to ensure
adequate tracking and enforcement of audit requirements and follow up on management decisions to
ensure accountability of subrecipients with timely and appropriate corrective action.
Part 2: Program managers have been assigned the responsibility to ensure that all subrecipient
certifications are obtained and reviewed, all required audits are completed and provided to NDDOT
and/or the audit clearinghouse in accordance with established time requirements, all management
decisions are issued as required, as corrective action plan is developed and implemented, and follow up
occurs as necessary.
Contact Person: Part 1: Jody Isaak, Audit Services Director; Part 2: Paul Benning, Local Government
Engineer
Anticipated Completion Date: March 1, 2021
Finding: 2020-025
Department of Transportation Response/Corrective Action Plan:
NDDOT agrees with the finding. An internal control questionnaire has been created and each agency is
required to fill out and return the questionnaire annually. A risk assessment matrix has also been
created and is filled out based on the internal control questionnaire in order to determine appropriate
subrecipient monitoring based on overall risk.
Contact Person: Paul Benning, Local Government Engineer
Anticipated Completion Date: March 1, 2021
Iii
F - 23 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
Finding: 2020-026
Department of Transportation Response/Corrective Action Plan:
ND DOT agrees with the finding. A process has been developed whereby each required element will be
provided to the subrecipient via inclusion in the subaward agreement.
Contact Person: Paul Benning, Local Government Engineer
Anticipated Completion Date: March 1, 2021
Iii
F - 24 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
STATE OF NORTH DAKOTA
OFFICE OF
STATE TREASURER
STATE CAPITOL
600 E BOULEVARD AVE DEPT 120
BISMARCK, ND 58505-0600
Thomas Beadle (701) 328-2643 FAX (701) 328-3002
STATE TREASURER treasurer.nd.gov
January 28, 2021
Joshua C. Ga llion
State Auditor
600 E Bou levard Ave
Bismarck, ND 58505
Mr. Gallion,
We have prepared the accompanying corrective action plan as required by the sta ndards
applicable to financial audits contained in t he Government Auditing Standards and by the audit
requirements of Tit le 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards. Specifica lly, for t he
finding related t o our agency, we are providing you with our responsible official's views, the
name of the contact person responsible for corrective action, t he corrective action planned,
and the anticipated completion date.
Sincerely,
Ryan Skar
Director of Finance
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
State Treasurer Office
Finding: 2020-027
State Treasurer Office Response/Corrective Action Plan: The Office of State Treasurer agrees with
the finding and subsequent recommendation made by the State Auditor’s Office. The Office of State
Treasurer will enhance its subrecipient monitoring processes by modifying the annual certifications we
send out to subrecipients to require an affirmative response as to whether the subrecipients are
required to complete an audit and, if required, that it was completed timely. We will ensure required
subrecipient audits are completed and posted to the Federal Audit Clearinghouse timely and, if not, will
follow up with the subrecipient to seek resolution. We will also review posted audits for all subrecipients
to ensure there are no deficiencies detected for Federal awards passed through by our office and, if
there are, appropriate action is taken to remedy said deficiencies.
Contact Person: Ryan Skor, Director of Finance
Anticipated Completion Date: July 31, 2021
F - 26 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
DocuSign Envelope ID: EDCFC48B-E18D-46B3-8E65-2949226E30D6
~ ~ State Capitol 600 E Boulevard Ave Dept. 215
NORTH DAKO T A Bismarck ND 58505-0230
UNIVERSITY SYSTEM Phone: 701.328.2960 Fax: 701.328.2961
E-mail: ndus.office@ndus.edu Web: ndus.edu
ACCESS. I NOVATIO . XC HCE.
February 23, 2021
The Honorable Joshua C. Gallion
State Auditor
600 East Boulevard Avenue Dept. 117
Bismarck, ND 58505-0060
Dear Mr. Gallion:
We have prepared the accompanying corrective action plan as required by the standards
applicable to financial audits contained in Government Auditing Standards and by the audit
requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards. Specifically, for
each finding we are providing you with our responsible officials' views, the names of the
contact people responsible for corrective action, the corrective action planned and the
anticipation completion date.
Sincerely,
Tammy Dolan
Vice Chancellor for Administrative Affairs/CFO
The North Dakota University System is governed by the State Board of Higher Education and includes:
Bismarck State College • Dakota College at Bottineau • Dickinson State University • Lake Region State College • Mayville Stat e University • Minot State University
North Dakota State College of Science • North Dakota State University • University of North Dakota • Valley City State University • Williston State College
State of North Dakota
Management’s Response and Corrective Action
Fiscal Years Ended June 30, 2019 and 2020
University System
Finding: 2020-028
University System Response/Corrective Action Plan: By June 30, 2021, Lake Region State College
(LRSC), Mayville State University (MaSU), North Dakota State College of Science (NDSCS) and Williston
State College (WSC) will carefully review the HEERF certification and agreement to ensure required
reports are filed in a timely manner.
Contact Person: LRSC: Corry Kenner, Vice President for Administrative Affairs
MaSU: Steve Bensen, Vice President for Business Affairs
NDSCS: Keith Johnson, Chief Financial Officer
WSC: Riley Yadon, Chief Financial Officer
Anticipated Completion Date: June 30, 2021
Iii
F - 28 | MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION
Management
and Budget
Be Legendary."
March 1, 2021
Mr. Josh Gallion
State Auditor
600 E Boulevard Avenue, Dept. 117
Bismarck, ND 58505
RE: Summary Schedule of Prior Audit Findings
North Dakota Single Audit Report
For Fiscal Years Ended June 30, 2020 and 2019
Dear Mr. Gallion:
In accordance with OM B's final guidance located in Title 2 of the Code of Federal Regulations, the state
of North Dakota is responsible for follow-up and corrective action on all audit findings identified in the
North Dakota Single Audit Report. As part of this responsibility, the state is required to prepare a
summary schedule reporting the status of all audit findings included in the prior audit's schedule of
findings and questioned costs relative to the federal awards. The Office of Management and Budget
compiles this information on behalf of the state and oversees the implementation status of these audit
findings.
Attached is the State of North Dakota' s Summary Schedule of Prior Audit Findings for the two fiscal
years ended June 30, 2020 and 2019. This summary identifies the implementation status of all prior
audit findings, except for those findings that have been fully corrected, are no longer valid, or do not
warrant further action on the part of the state.
Sincerely,
Jeff Larshus
Director of State Financial Services
600 E Boulevard Ave, Dept 110 I Bismarck, ND 58505-0400 I nd.gov/omb
DIRECTOR CENTRAL F ACILITY FISCAL HUMAN RESOURCE RISK
& ADMINISTRATION SERVICES MANAGEMENT MANAGEMENT MANAGEMENT SERVICES MANAGEMENT
1600 E Cenrury Ave, Suite 4
4th Floor 14th Floor 4th Floor 4th Floor 14th Floor 6,smarcl(, N D 58503
701 .328.4904 701.328.3293 701.328.2471 701 .328.2680 701.328.3293 701 .328.7584
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
DEPARTMENT OF HUMAN SERVICES
Finding 2018-001 Page D-9
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.777 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 Centers for Medicare and Medicaid Services
Medicaid Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services complete the CMS-64
report no later than 30 days after the end of each quarter.
Status: This recommendation is implemented. The backlog has been cleared and
the reports have been completed timely since September 30, 2018. CMS
has reviewed and agreed with this.
G-1
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-002 Page D-10
Recurring: Year of initial finding was 2016-2015
CFDA # 93.777 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 Centers for Medicare and Medicaid Services
Medicaid Cluster
Questioned Cost: $6,617
Recommendation: We recommend the Department of Human Services develop system edit
checks and improve system functionality to ensure eligibility determinations
made for the Medicaid program are proper.
Status: This recommendation is partially implemented. The Medicaid Policy Unit
has implemented ELearning training that is mandatory for all Medicaid
Eligibility Workers.
- The Training Modules are as follows:
- Electronic Data Sources
- Documentation & Narratives
- Common Eligibility Errors: Income
- Common Eligibility Errors: Household Composition
- Non-ACA Reviews
- TPL
The system error related to Defect 158460 has since been implemented
which fixed the issue in SPACES.
The PaSS Unit provides ongoing training for eligibility workers.
Money was returned in July 2019.
G-2
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-003 Page D-11
Recurring: Year of initial finding was 2012 - 2011
CFDA # 93.777 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 Centers for Medicare and Medicaid Services
Medicaid Cluster
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services ensure the Program
Integrity Unit fully executes their sampling plan.
Status: This recommendation was partially implemented. The Program Integrity
Unit has revised the language in the Audit Overview Oversight document to
better reflect the new rehabilitation provider process. It is not a formal audit
but rather an educational review process meant to assist the providers in
billing correctly.
The Program Integrity Unit has reassigned the layperson ambulance
reviews to the Utilization Review team due to no longer having a layperson
in the PIU. The PIU will pull the applicable claims data for the UR team to
conduct the review. Prior to reassigning to the UR team, a temporary
enrollment staff helped get the late ambulance claim reviews caught up.
Requests for the sample of ambulance claims for 4th quarter 2020 went out
and we are currently receiving responses and are current with the reviews.
The semi-annual recipient analysis for first half of 2020 was completed in
October of 2020. The second half of 2020 will be reviewed this month.
Due to the declaration of the Public Health Emergency as of March 2020,
State Medicaid Agencies were encouraged to halt auditing to allow
healthcare facilities to focus on treating patients associated with the
pandemic.
G-3
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-004 Page D-12
Recurring: Year of Initial Finding is 2016 - 2015
CFDA # 93.777 U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 Centers for Medicare and Medicaid Services
93.767 Medicaid Cluster and Children’s Health Insurance Program
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services develop system edit
checks within the SPACES system to ensure verifications are used in the
eligibility determination process.
Status: This recommendation was implemented. Verification procedures were
enhanced in SPACES release 2, which was implemented in 2019.
Eligibility workers received tasks related to interface information received
from various sources such as Social Security Administration, Internal
Revenue Services, Job Service North Dakota, etc. In addition, system fixes
for verification notices including data and due dates, due date for requested
verification, and added selection options for verification of identity types
were implemented in 2016 and 2017. Information regarding training on
policy and SPACES were provided to eligibility workers.
G-4
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-005 Page D-14
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.777 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 Centers for Medicare and Medicaid Services
Medicaid Cluster
Questioned Cost: $23
Recommendation: We recommend the Department of Human Services strengthen controls to
prevent duplicate payments.
Status: This recommendation was partially implemented. The Department will
implement additional editing in MMIS during the claim adjudication process
prior to claims payment to enhance the identification of potential duplicate
payments. During the next year, the Department will review at least
quarterly whether additional editing may be necessary to enhance the
identification of potential duplicate payments.
Money was returned in July 2019.
G-5
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-006 Page D-15
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.767 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Children’s Health Insurance Program
Questioned Cost: $607
Recommendation: We recommend the Department of Human Services develop system edit
checks and improve system functionality to ensure eligibility determinations
made for the CHIP program are proper.
Status: This recommendation is partially implemented. The Medicaid Policy Unit
has implemented ELearning training that is mandatory for all Medicaid
Eligibility Workers.
- The Training Modules are as follows:
- Electronic Data Sources
- Documentation & Narratives
- Common Eligibility Errors: Income
- Common Eligibility Errors: Household Composition
- Non-ACA Reviews
- TPL
The system error related to Defect 158460 has since been implemented
which fixed the issue in SPACES.
The PaSS Unit provides ongoing training for eligibility workers.
Money was returned in July 2019.
G-6
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-007 Page D-16
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services develop procedures to
ensure required child care records are maintained by the child care
provider.
Status: This recommendation was not implemented. Early Childhood Services has
received Technical Assistance from the regional office (OCC) regarding
childcare records. Their recommendations according to CCDF
requirements, were to update our compliance checklist (see below) and to
eliminate the childcare record (SFN 1426) which is not a required form. All
specialists will be using the updated compliance checklist by May of 2021.
CHILD CAIRE 1RECOllililS WORKSHEET
Review of no les.:s than 30 files must be conducted o n site. If the abbreviated review reveals incomplete reco rds, an
additronal 30 fires must b e review ed. This p rocess w i II continue, 30 files at a ti me, unt il no incomplete records are f ound
or until all fi les have been review ed.
For faciliti es w i II less tlhan 30 ohi lcfren enro lled, al I files w il I be review ed.
RieHrds Reviewed Age Gmup Revi ewed: Last Nam es f rom: Last Nam es Through : Incomplete Records
Found?
30 All Yes I No
ln•l!rt Add Row Btltton He re
G-7
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-008 Page D-18
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services develop adequate
sampling methods for the selection of Child Care Assistance eligibility case
files. Methods should include addressing identified risks, ensuring each
county is reviewed over a specified time, and determining sample size
based on prior errors.
Status: This recommendation was implemented. On the first working day of each
month, ITD generates a data extract containing child care subsidy
payments for the three months prior. Using an analytics software, ITD
generates a random sample by dividing the number of cases listed in the
monthly sampling frame by the number of cases to be selected for the
sample. Prior to the end of the federal fiscal year, AQ staff review sampled
cases and creates a listing of the 53 counties in ND not yet represented in
any of the monthly samples. Utilizing the entire universe created for the
fiscal year, cases from the missing counties are selected for review using a
simple random sample from the analytics software.
G-8
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-009 Page D-20
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $682,531
Recommendation: We recommend the Department of Human Services develop procedures to
detect and prevent Child Care Assistance Program payments from being
made outside of the grant award’s period of performance.
Status: This recommendation was implemented. The Department uses speed
charts to determine coding for each expenditure. As of October 10 (this
date is used so that payroll for September clears before the speed chart is
changed) all speed charts are updated to the new grant coding. Any
expenditures received related to the prior year are manually coded to the
correct grant year. Both of these grants in question have a 90 day window
to get expenditures paid after the grant closes. Correspondence was sent
to all program accountants to ensure that the speed charts were updated in
a timely manner.
G-9
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-010 Page D-21
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $529,160
Recommendation: We recommend the Department of Human Services ensure that child care
providers have met all necessary licensing requirements prior to issuing
Child Care Assistance payments.
Status: The recommendation was partially implemented. The State initiated a
process redesign for early childhood licensing in August 2019. The
redesign was intended to improve consistency of reviews, ongoing
monitoring, and corrective action across all 19 Human Service Zones. The
bulk of the redesign work took place in advance of the former county-
employed early childhood licensors becoming state employees (January
2020).
As part of Redesign, DHS piloted the use of a streamlined on-site visit
checklist to identify opportunities for efficiencies. Thirteen counties utilized
the abbreviated form during pilot, the remaining counties continued to
utilize the existing form. It was determined that the abbreviated form would
not adequately capture information needed so, in June 2020 all licensors
reverted to utilization of the full-length Compliance Checklist to assure all
Health and Safety standards are being met.
In September 2020 DHS began the work of implementing a comprehensive
Early Childhood Licensing database that will greatly improve the ability to
properly license providers. The system is anticipated to be complete by
March 2022.
G - 10
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-011 Page D-22
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $1,843
Recommendation: We recommend the Department of Human Services develop and
implement procedures to detect and prevent duplicate and other improper
payments from being issued under the Child Care Assistance program.
Status: The recommendation was partially implemented. The Lead Agency
receives a monthly report that contains payments that could be considered
duplicate that were made for three months prior to the current month. The
report contains payments that meet the following criteria:
- Same child
- Same caretaker
- Same provider
- Same service month
Department staff reviews identified payments on this report and maintains a
log and notes on each situation and any follow up that was completed with
Eligibility workers.
The consolidated eligibility system, SPACES, where payments are issued,
does have checks validations in place to ensure payments to no exceed the
state maximum rate. An additional warning message is in place and is
received when a payment already exists for the child and provider for a
service month and a new payment with the same criteria is entered.
Workers are able to by-pass this warning message as there are instances
where a second payment may be needed. The department will explore a
system enhancement to make this warning message more prominent in an
effort to reduce duplicate payment situations.
G - 11
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-012 Page D-24
Recurring: Year of initial finding was 2008 - 2007
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $216
Recommendation: We recommend the Department of Human Services:
1. Develop and implement controls to ensure that all eligibility workers are
collecting and maintaining all applicable information for Child Care
Assistance eligibility determinations, and;
2. Properly determine eligibility for individuals receiving Child Care
Assistance and issue payments that comply with requirements set in the
Code of Federal Regulations for Child Care Development Funds.
Status: This recommendation was partially implemented. DHS provides policy and
system trainings, tips and tricks and policy and processing reminders as
needed through periodic statewide trainings, monthly newsletters and
online help resources. This effort is done in collaboration with the Policy
and System Support (PaSS) unit in Economic Assistance. The PaSS unit
will begin conducting CCAP New Worker Training annually beginning the
winter of 2022. The training will cover all aspects of CCAP eligibility.
In March 2019, the department implemented a new eligibility system,
SPACES. The implementation of this new system has made processing of
cases less error prone as the system calculates all aspects of CCAP
eligibility such as countable income amounts, countable households
members, allowable child care hours, etc. The department is continually
making improvements to the system through change requests.
Quality Assurance reviews are completed monthly and the results of those
reviews are used to determine training needs, corrective active, etc. to
mitigate errors.
G - 12
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-013 Page D-26
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services develop procedures to
monitor and ensure the resolution of corrective orders including that
resolution occurs within specified time frames.
Status: This recommendation was not implemented. During the audit timeframe,
County Licensors were inconsistent in how they followed up on corrective
orders. As part of Early Childhood Services Redesign (completed by March
2020), all Licensing Specialists are assigned a specific provider case load,
which will help Licensing Specialists keep track of any correction orders
and follow-up expectations that affect providers they are assigned to work
with.
G - 13
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-014 Page D-27
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services:
1. Update the licensing study to include requirements for all necessary
health and safety standards for self-declared providers, and;
2 Ensure self-declared providers meet all health and safety standards
required to be licensed.
Status: This recommendation was not implemented. The State initiated a process
redesign for early childhood licensing in August 2019. The redesign was
intended to improve consistency of reviews, ongoing monitoring, and
corrective action across all 19 Human Service Zones. The bulk of the
redesign work took place in advance of the former county-employed early
childhood licensors becoming state employees (January 2020).
As part of Redesign, DHS piloted the use of a streamlined on-site visit
checklist to identify opportunities for efficiencies. Thirteen counties utilized
the abbreviated form during pilot (August 2019 – March 2020); the
remaining counties continued to utilize the existing form. It was determined
that the abbreviated form would not adequately capture information needed
so, in August 2020 all licensors reverted to utilization of the full-length
Compliance Checklist to assure all Health and Safety standards are being
met.
As part of North Dakota’s regular federal review, the current compliance
checklist was reviewed by Regional OCS and all recommendations will be
implemented in May 2021.
G - 14
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-015 Page D-29
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services develop a centralized
tracking mechanism for all reports of irregularities and deficiencies of the
Child Care Assistance Program. In addition, we recommend the
Department develop procedures for monitoring the timely and proper
determination of fraudulent activity.
Status: This recommendation was implemented. The Department continues to use
the Department’s Fraud Log to track reports that are received by the state
office. When these reports are received, state policy staff review the
information and forward the information on to the appropriate county as
necessary. The Department has reached out to their federal technical
assistance partner, the National Center on Subsidy Innovation and
Accountability (NCSIA), for assistance in strengthening and implementing
procedures. After NCSIA reviews the Department’s Intentional Program
Violation (IPV) e-learning, they will provide feedback and suggestions of
various types of red flag reports implemented by other states that help to
identify potential instances of fraud. The Department continues to utilize
existing reports, such as a duplicate payment report and a duplicate SSN
report. The Department implemented a new integrated eligibility system in
March 2019. With the implementation, eligibility information and
verifications are shared across multiple programs in one system. This will
further help to ensure that reported information is being evaluated for
CCAP when the information is reported for a different program.
G - 15
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-016 Page D-30
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services develop a centralized
tracking mechanism to properly monitor subrecipient corrective actions and
deficiencies identified in the Quality Control eligibility reviews.
Status: This recommendation was implemented. Child Care Assistance policy staff
are included on all case finding emails that Quality Assurance/Control
sends to counties. Additionally, policy staff receive a copy of the case
findings review report used by Quality Assurance/Control. Policy then
reviews the report and will follow up with counties when a corrective action,
such as establishing a claim, is appropriate. Review of this report began in
September 2018 for the review month of July 2018.
G - 16
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-017 Page D-32
Recurring: Year of initial finding was 2016-2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services perform annual
unannounced inspections of licensed and self-declared child care providers
in operation as required by the Code of Federal Regulations and
Department policy.
Status: This recommendation was partially implemented. During the audit
timeframe County Licensors were inconsistent in rates of completion for
unannounced visits. This was due, in part, to the difference in how each
County chose to administer and staff this function; licensors were not
consistently required to maintain certain caseloads which contributed to
uneven application of this part of the regulation.
A major focus of the redesign effort was to ensure that the system was
structured to ensure early childhood specialists time was organized to
maximize time spent on visits. As part of redesign all Licensing Specialists
are assigned a specific case load so they can schedule and follow through
with unannounced visits for their assigned providers. This new distribution
of work accompanied the transition from county to state employment (Jan
2020) and was being implemented by mid-2020.
Early Childhood Services is currently in the process of designing a
database to ensure all required documents and licensing visits are
complete prior to issuing licenses and certificates to providers. The data
base will be complete in April of 2022.
G - 17
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-018 Page D-33
Recurring: Year of initial finding is 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services perform effective
monitoring procedures to ensure all functions of the Child Care Assistance
program are properly completed including monitoring correction orders,
completing unannounced visits, and properly licensing providers.
Status: This recommendation was partially implemented. Early Childhood Services
Redesign moved all County Licensors to State employment (Jan 2020) and
Early Childhood Services Regional Representatives to a Supervisor status
(March 2020). These steps will change how a QA visit is completed.
Starting in March 2020, regional supervisors were beginning to conduct
both standard performance reviews of licensors as well as quality
assurance review of outputs and outcomes. This includes review of how
licensors conduct visits and complete their core work related to license
compliance and health and safety practices of child care programs.
G - 18
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-019 Page D-34
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.575 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.596 Administration for Children and Families
CCDF Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services develop additional
methods to detect instances that could result in fraudulent Child Care
Assistance payments.
Status: This recommendation was implemented. The Child Care Assistance
Administrator receives a monthly report of potential duplicate payments
made for three months prior to the current month. The report contains
payments that meet the following criteria:
Same child
Same caretaker
Same provider
Same service month
Child Care Assistance staff review all payments on this report and
maintains a log of notes on each situation and any follow up that was
completed with Eligibility workers. In many instances, the second payment
to a child in the same case was due to an underpayment being issued.
Underpayments are issued when it was determined that the family was
entitled to more assistance then was first determined.
Child Care Assistance Policy does allow a child to be in two separate cases
at the same time due to joint custody arrangements. The system notifies a
worker when they have entered a child with the same SSN or identifying
number in a case when the child is already known to another case.
However, due to the allowance of a child in two cases, the workers can
bypass the edit. The edit serves as a notification to workers to verify that
joint custody is appropriate in the case and to alert them to instances of a
duplicate child when they may not have been aware.
Child Care Assistance applies a state maximum rate per child, per provider
in each case a child is receiving assistance. The state maximum rate is
based on the determined level of care, age of child and provider type. A
G - 19
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
child is allowed to have more than one provider and each provider is
subject to their own state maximum rate. Payments cannot exceed the
state maximum rate for each provider, per case. More than one payment
may be issued per provider in a case, however, the system contains checks
and balances to ensure that all total amounts paid do not exceed the
maximum state rate per provider in a service month.
In addition, the new eligibility system will be additional controls in place to
help detect and preview duplicate and other improper payments.
Finding 2018-020 Page D-36
CFDA # 93.659 U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Adoption Assistance
Questioned Cost: $367,965
Recommendation: We recommend the Department of Human Services ensure monthly
maintenance payments made in the Adoption Assistance program are
proper.
Status: This recommendation was implemented. The Department returned the
overpayment of federal funds. As soon as the Department discovered the
overpayment, additional controls were implemented to ensure monthly
maintenance payments are proper. The controls put into place are a
secondary review of all new subsidy payments entered, a secondary review
of all changes to monthly subsidy amounts, and a scan of each months’
payment report for outlier payment amounts.
G - 20
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-021 Page D-37
CFDA # 93.659 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Adoption Assistance
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services properly calculate the
savings of State funds for the Adoption Assistance program.
Status: This recommendation was implemented. The Department will strengthen
review procedures to ensure the savings of State funds is properly
calculated and file a revised report. The revised report will result in an
increase in unexpended savings. The Department has properly reported
expended savings and has met the 30% requirement to be spent on post-
adoption services and two-thirds of the 30% to be spent on post-adoption
and post-guardianship services.
G - 21
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-022 Page D-39
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.568 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Low-Income Home Energy Assistance
Questioned Cost: $40,994
Recommendation: We recommend the Department of Human Services implement controls to
detect and prevent LIHEAP payments from being made outside of the grant
award’s period of performance.
Status: This recommendation was implemented. Except for DHS 2019 and 2020
LIHEAP State Plans, all previous state plans contained language that
stated: “LIHEAP funded services would be available … until the obligated
funds have been expended.” Section O(1), 2018 State Plan. This
language was in violation of 31 USC § 1552 (a) which states that all fixed
appropriation accounts end on September 30th of the 5th fiscal year after the
period of availability for obligation of the funds ends. However, this
language was not in violation of state law, as state law clearly establishes
that expenditures of federal funds must comply with all mandatory federal
laws. NDAC § 4-12-01-05. and under Section 2605(d) of P.L.97-35 states
are required to expend funds in accordance with their state plan. Prior to
2019, DHS was expending funds according to the state plan as written.
Once it was discovered that the state plan was in error, the default would
be federal law 31 USC § 1552(a) to establish the length of time for
expenditure of obligated funds. This default determination by DHS is
authorized under NDAC § 4-12-01-05(2), as state agencies are
permitted to comply with the terms and conditions of federal grants,
and 31 USC § 1552(a) is a general term applicable to all federal
grants unless otherwise indicated. This determination is also allowed
under state law, as OMB is allowed to determine the terms of
contracts and nothing in state law prohibits DHS from following all
applicable federals to the grant funds. NDAC §§ 4-12-13-01(2); 4-12-
01-05 (2).
G - 22
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-023 Page D-40
CFDA # 93.568 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Low-Income Home Energy Assistance
Questioned Cost: $20,478
Recommendation: We recommend the Department properly account for subrecipient and
contractor administrative costs when tracking compliance with
administrative cost limits.
Status: This recommendation was implemented. The Department has adopted
TANF rules in determining administrative costs and has applied these rules
to contracts with the ND Department of Commerce, Division of Community
Services. 45 CFR 263.0 (b)(1) excludes from administration costs the
direct costs of providing program services, whether by the state or
contracts devoted entirely to such activities. It also excludes salaries and
benefit costs for staff providing program services and direct administrative
costs associated with providing the services such as the costs for supplies,
equipment, travel, postage, rental and maintenance of office space. The
Department’s contract with DCS requires the grantee (DCS) to provide
weatherization services to Low Income Home Energy Assistance Program
eligible households. The costs associated with this contract are solely for
providing a weatherization program in the state ad absent such costs a
program of this nature would not exist. General Administration of this
contract and program is performed in the state offices and any costs
incurred by the state for this purpose are tracked and reported toward the
10% allowable funds for administration.
G - 23
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-024 Page D-41
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.568 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Low-Income Home Energy Assistance
Questioned Cost: $1,071
Recommendation: We recommend the Department of Human Services review policies and
processes surrounding the calculation of benefits for the Low-Income Home
Energy Assistance Program (LIHEAP) to ensure proper payments are
being made.
Status: This recommendation was implemented. Statewide LIHEAP training
including the calculation of benefits and proper documentation of eligibility
requirements was conducted in August and September 2018. New
LIHEAP workers will be assigned e-learning courses starting with the 2020
heating season. In addition, training refresher courses were completed in
mid-August 2019. In-person training will be conducted on an as-needed
basis.
Finding 2018-025 Page D-43
CFDA # 93.568 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Low-Income Home Energy Assistance
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services update the LIHEAP
application form to include fields for all allowable expense deductions.
Status: This recommendation was implemented. In August 2019, the LIHEAP
application was updated to inform applicants of allowable expense types for
LIHEAP and allocates space within for recording these amounts. The
application is available starting with the FY 2020 heating season.
G - 24
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-026 Page D-45
CFDA # 93.566 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health and Human Services
Administration for Children and Families
Office of Refugee Resettlement (ORR)
Refugee and Entrant Assistance – State Administered Programs
Questioned Cost: $117,635
Recommendation: We recommend the Department of Human Services implement control
procedures to prevent and detect payments of the Refugee and Entrant
Assistance program from occurring outside the period of performance.
Status: This recommendation was implemented. The Department uses speed
charts to determine coding for each expenditure. As of October 10 (this
date is used so that payroll for September clears before the speed chart is
changed) all speed charts are updated to the new grant coding. Any
expenditures received related to the prior year are manually coded to the
correct grant year. Both of these grants in question have a 90 day window
to get expenditures paid after the grant closes. Correspondence was sent
to all program accountants to ensure that the speed charts were updated in
a timely manner.
G - 25
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-027 Page D-46
CFDA # 93.566 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health and Human Services
Administration for Children and Families
Office of Refugee Resettlement (ORR)
Refugee and Entrant Assistance – State Administered Programs
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services implement a review
process to ensure accuracy and completion of the ORR-6 Performance
Report prepared and submitted by Lutheran Social Services.
Status: This recommendation was implemented. The Department has been
reviewing the procedures of the ORR-6 report. The Department has
developed language to add to the contract which would give the
Department the ability to review the report. There is a plan to propose
adding the language to the contract.
G - 26
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-028 Page D-48
CFDA # 93.959 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Substance Abuse and Mental Health Services Administration
Block Grants for Prevention and Treatment of Substance Abuse
Questioned Cost: $31,143
Recommendation: We recommend the Department of Human Services implement control
procedures to prevent and detect Substance Abuse Prevention and
Treatment payments from occurring outside the period of performance.
Status: This recommendation was implemented. The Department uses speed
charts to determine coding for each expenditure. As of October 10 (this
date is used so that payroll for September clears before the speed chart is
changed) all speed charts are updated to the new grant coding. Any
expenditures received related to the prior year are manually coded to the
correct grant year. Both of these grants in question have a 90 day window
to get expenditures paid after the grant closes. Correspondence was sent
to all program accountants to ensure that the speed charts were updated in
a timely manner.
G - 27
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-029 Page D-49
Recurring: Year of initial finding was 2016 – 2015
CFDA # 93.658 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Foster Care – Title IV-E
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services ensure proper and
timely resolution for corrective actions identified during subrecipient
monitoring for the Foster Care Program.
Status: This recommendation was implemented. The policy was updated May 30,
2019 to ensure proper and timely resolution for corrective actions identified.
The Department is considering foster care eligibility centralization as part of
the Social Service Redesign efforts. This would allow the Department to
have complete oversight and authority of foster care eligibility and
payments statewide.
G - 28
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-030 Page D-50
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.563 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Child Support Enforcement
Questioned Cost: Unknown
Recommendation: We recommend the Department of Human Services complete a final
reconciliation of amounts reported to the Administration for Children and
Families and in the State’s accounting system within a reasonable
timeframe after the end of each grant period.
Status: This recommendation was implemented. The Department has the grant
reconciliation up to date and will continue going forward. A
policy/procedure has been created to document the plan and outline the
timeliness expected on these reconciliations.
G - 29
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-031 Page D-52
Recurring: Year of initial finding was 2016 - 2015
CFDA # 84.126 U.S. DEPARTMENT OF EDUCATION
Employment and Training Administration
Rehabilitation Services – Vocational Rehabilitation Grants to States
Questioned Cost: $71,628
Recommendation: We recommend the Department of Human Services implement procedures
to prevent and detect Vocational Rehabilitation payments from occurring
outside the period of performance.
Status: This recommendation was partially implemented. Program Accountant
created a procedure manual for the end of the period of performance, to
identify charges that need to be applied to the appropriate grant year.
This procedure manual outlines the steps the Program Accountant needs to
take in order to check all transactions posting to Peoplesoft from the
AWARE case management system, check Peoplesoft speedcharts for both
VR central office and the VR regional offices located in the Human Service
Centers, and checking the history database for any errors on to ensure a
comprehensive review of all transactions between the AWARE system and
Peoplesoft.
G - 30
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-032 Page D-53
Recurring: Year of initial finding was 2016 - 2015
CFDA # 84.126 U.S. DEPARTMENT OF EDUCATION
Employment and Training Administration
Rehabilitation Services – Vocational Rehabilitation Grants to States
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services ensure the SF-425
Federal Financial Reports and RSA-2 Annual Vocational Rehabilitation
Program/Cost Reports for the Vocational Rehabilitation program are
completely accurate.
Status: This recommendation was implemented. The Department has developed
additional controls which will include a double check of the numbers
reported by another staff member. Instructional notes have also been
added to the worksheets for the SF-425 reports to clarify that the cash
basis PeopleSoft reports are used on the Federal Cash section of the
report and that the accrual PeopleSoft reports are only used in the Federal
Expenditures and Unobligated Balance section of the report. Notes have
also been added to assure adjusting journal vouchers are reported during
the fiscal period in which they were processed.
G - 31
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-033 Page D-55
Recurring: Year of initial finding was 2016 - 2015
CFDA # 84.126 U.S. DEPARTMENT OF EDUCATION
Employment and Training Administration
Rehabilitation Services – Vocational Rehabilitation Grants to States
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services ensure individualized
Plans for Employment (IPEs) are established within 90 days of the eligibility
determination for the Vocational Rehabilitation program.
Status: This recommendation was implemented. The Department made procedure
changes to ensure IPEs are established within 90 days of the eligibility
determination for the Vocational Rehabilitation program.
Finding 2018-034 Page D-56
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.045 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration on Aging
Aging Cluster
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services ensure that the SF-425
Federal Financial Reports for the Aging Services grants are completed
properly by accurately reporting the cash disbursements amount.
Status: This recommendation was implemented. The Department added
instructional notes to the worksheets for the SF-425 reports to clarify that
the cash basis (CB) PeopleSoft reports are used on the Federal Cash
section of the report and that the accrual PeopleSoft reports are only used
in the Federal Expenditures and Unobligated Balance section of the report.
G - 32
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-035 Page D-57
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.568 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.575 Administration for Children and Families
93.596 CCDF Cluster
93.658 Foster Care - Title-IV-E
Low-Income Home Energy Assistance
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services update existing
policies and procedures to ensure the subrecipient risk assessments
completed are used to determine the nature and extent of subrecipient
monitoring.
Status: This recommendation was partially implemented. The Foster Care program
was the only program with outstanding issues. The Child and Family
Services (CFS) policy Foster Care Eligibility Quality Assurance Reviews
447-10-18 is under revision to accommodate the changes of eligibility unit
implementation and how to apply review for high risk of agencies.
The fiscal office compiles the county/zone risk assessment on a yearly
basis. CFS sends NDDHS Fiscal the required information (results of Foster
Care reviews, OCR reviews, etc). The request to take the results of that
combined risk assessment into account when selecting foster care reviews
is embedded into the new draft policy. For example: If a zone is deemed
high risk during the risk assessment and is not due for a file review, the
high-risk knowledge will be considered in future sampling.
It is imperative to mention that the North Dakota Department of Human
Services, the North Dakota Association of Counties, and local human
service zone leaders, with the support of Gov. Doug Burgum and state
lawmakers continue to redesign social services. This collaborative effort
began with the passage of Senate Bill 2206 in 2017, continued with the
passage of Senate Bill 2124 in 2019 and is currently being heard as Senate
Bill 2086 during the 2021 legislative assembly. Due to redesign efforts, the
Centralized Foster Care & Subsidized Adoption Eligibility Unit, absorbed as
a function of Children and Family Services (CFS), went live February 1,
2021. The overall goals are to implement standardized procedures which
offer consistency and efficiencies for workers, providers, and families, while
G - 33
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
reducing financial errors and overpayments for the state. The unit will
manage the:
- Eligibility determinations for foster care cases, while authorizing
eligible foster care payments.
- Eligibility determinations for children seeking prevention
services, also known as candidates for foster care.
- Sub-adopt negotiation process, while authorizing all eligible
subsidy payments.
-Opening and closing of ND Medicaid for all foster and sub-adopt
cases.
Effective, February 1, 2021 much of the review is about our own NDDHS
employees and error rate with payments or eligibility determinations.
However, we will be able to notify the Zones/agencies if they are not getting
information to the unit timely resulting in fiscal error.
G - 34
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-036 Page D-59
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.777 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 U.S. DEPARTMENT OF EDUCATION
93.767 Medicaid Cluster
93.575 Children’s Health Insurance Program
93.596 CCDF Cluster
93.568 Low-Income Home Energy Assistance
93.658 Foster Care - Title IV-E
93.044 Aging Cluster
93.045 Child Support Enforcement
93.053 Rehabilitation Services – Vocational Rehabilitation Grants to States
93.563
84.126
Questioned Cost: $0
Recommendation: We recommend the Department of Human Services take prompt action to
implement prior audit findings.
Status: This recommendation is partially implemented. The Department is working
with our divisions to ensure prompt action is taken to implement prior audit
findings.
G - 35
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
DEPARTMENT OF PUBLIC INSTRUCTION
Finding 2018-037 Page D-61
Recurring: Year of initial finding was 2016 - 2015
CFDA # 84.366 U.S. DEPARTMENT EDUCATION
Mathematics and Science Partnerships
Questioned Cost: $0
Recommendation: We recommend the Department of Public Instruction ensure on-site
monitoring or adequate desk reviews are completed of the activities for all
subrecipients under the Mathematics and Science Partnerships program.
Status: Finding was not implemented as the program no longer exists.
Finding 2018-38 Page D-62
CFDA # 84.367 U.S. DEPARTMENT OF EDUCATION
Supporting Effective Instruction State Grant
Questioned Cost: $6,064
Recommendation: We recommend the Department of Public Instruction properly follow all
Federal regulations when allocating the Supporting Effective Instruction
State Grants program funds to schools as well as ensuring the allocation is
properly approved.
Status: The recommendation was implemented. After discussions with the USDE it
was determined that the adjustments will be made to the school year 2020-
21 allocations for school districts. This will happen when we receive our
State allocation from USDE which will occur in summer 2020.
G - 36
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-039 Page D-63
CFDA # 10.553 U.S. DEPARTMENT OF AGRICULTURE (USDA)
10.555 Food and Nutrition Service
10.556 Child Nutrition Cluster
10.559
Questioned Cost: $29,550
Recommendation: We recommend the Department of Public Instruction ensure that payments
of the Child and Nutrition Cluster are not made after the period of
performance.
Status: The recommendation was not implemented. New action plan will be
implemented by March 31, 2021.
G - 37
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-040 Page D-65
CFDA # 84.367 U.S. DEPARTMENT OF EDUCATION
10.565 U.S. DEPARTMENT OF AGRICULTURE (USDA)
10.568 Food and Nutrition Service
10.569 Supporting Effective Instruction State Grant
84.010 Title I Grants to Local Educational Agencies
84.027 Twenty-First Century Community Learning Centers
84.173 Food Distribution Cluster
84.287 Special Education Cluster (IDEA)
10.553 Child Nutrition Cluster
10.555 Child and Adult Care Food Program
10.556 Mathematics and Science Partnerships
10.559 Adult Education State Grant Program
84.366 Food Distribution Program on Indian Reservations
84.022 Farm to School Grant Program
10.567
10.575
Questioned Cost: $0
Recommendation: We recommend the Department of Public Instruction accurately prepare the
Schedule of Expenditures of Federal Awards.
Status: Finding was implemented according to action plan.
G - 38
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-041 Page D-67
CFDA # 10.558 U.S. DEPARTMENT OF EDUCATION
84.010 U.S. DEPARTMENT OF AGRICULTURE (USDA)
84.027 Food and Nutrition Service
84.173 Child Nutrition Cluster
10.553 Child and Adult Care Food Program
10.555 Fresh Fruit and Vegetable Program
10.556 Title I Grants to Local Educational Agencies
10.559 Special Education Cluster (IDEA)
10.582 Food Distribution Program on Indian Reservations
10.567
Questioned Cost: $0
Recommendation: We recommend the Department of Public Instruction:
1. Ensure all subrecipients obtain audits in accordance with 2 CFR Subpart
F if they meet the requirements;
2. Issue management decisions within a timely manner, and;
3. Ensure subrecipients took timely correction action on deficiencies
identified in the audits.
Status: The recommendation was not implemented. New action plan will be
implemented by May 1, 2021.
G - 39
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
Finding 2018-042 Page D-69
Recurring: Year of initial finding as 2016 - 2015
CFDA # 84.367 U.S. DEPARTMENT OF EDUCATION
84.010 U.S. DEPARTMENT OF AGRICULTURE (USDA)
84.027 Food and Nutrition Service
84.173 Supporting Effective Instruction State Grant
84.287 Title I Grants to Location Educational Agencies
10.553 Twenty-First Century Community Learning Centers
10.555 Special Education Cluster (IDEA)
10.556 Child Nutrition Cluster
10.559 Child and Adult Care Food Program
10.558
Questioned Cost: $0
Recommendation: We recommend the Department of Public Instruction ensure that
subrecipients are made aware of all required grant award information.
Status: Finding was partially implemented according to action plan. We
implemented the requested changes to our Grant Award Notification form
to make it in compliance with 2 CFR 200.331. After this change, there were
instances where DPI employees did not complete the new form properly
resulting in a new finding.
G - 40
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
GOVERNOR’S OFFICE
Finding 2018-043 Page D-70
Recurring: Year of initial finding was 2016 - 2015
CFDA # 93.777 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.778 Centers for Medicare and Medicaid Services
Medicaid Cluster
Questioned Cost: $0
Recommendation: We recommend the State of North Dakota establish a Medicaid Fraud
Control Unit that is separate and distinct from the Department of Human
Services.
Status: This recommendation has been fully implemented. The Governor’s
Executive Budget that was released on December 5, 2018 included a
recommendation and funding for establishing a Medicaid Fraud Control
Unit to be housed within the Attorney General’s Office. This unit was to
include 5 additional employees with the sole purpose of Medicaid Fraud
investigations. The final budget that was approved by the 66th Legislative
Assembly and signed by the Governor on May 1, 2019 included 6
additional employees including 1 attorney, 2 auditors, 2 criminal
investigators and 1 administrative assistant. The Medicaid Fraud Control
unit is established as a division of the Attorney General’s office and is
under the supervision and control of the Attorney General. The staff in this
unit are responsible for investigating any reported Medicaid Fraud.
Additional information and the relevant law for this unit can be found on the
Attorney General’s website at: https://attorneygeneral.nd.gov/attorney-
generals-office/medicaid-fraud.
G - 41
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
HIGHWAY PATROL
Finding 2018-044 Page D-72
CFDA # 20.218 U.S. DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
Motor Carrier Safety Assistance Program
Questioned Cost: $0
Recommendation: We recommend Highway Patrol ensure all financial transactions charged to
the Motor Carrier Safety Assistance Program (MSCAP) within the state’s
accounting system are reviewed and approved by appropriate program
personnel.
Status: We have implemented our changes in procedures and those changes have
also been acknowledged as appropriate by the FMCSA.
G - 42
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
OFFICE OF MANAGEMENT AND BUDGET
Finding 2018-045 Page D-73
CFDA # Various Various
Questioned Cost: $0
Recommendation: We recommend the Office of Management and Budget ensure that the
Schedule of Expenditures of Federal Awards (SEFA), notes to the SEFA,
and Summary Schedule or Prior Audit Findings are accurately prepared
and in accordance with Uniform Guidance.
Status: The Office of Management and Budget has implemented the
recommendation according to the corrective action plan.
G - 43
STATE OF NORTH DAKOTA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the fiscal years ended June 30, 2020 and 2019
By State Agency
UNIVERSITY SYSTEM
Finding 2018-046 Page D-75
CFDA # 84.007 U.S. DEPARTMENT OF EDUCATION
84.038 Student Financial Aid Cluster
84.063
84.268
Questioned Cost: $2,727
Recommendation: We recommend that DSU and NDSU properly calculate the return of Title
IV funds based on the federal regulations.
Status: DSU and NDSU have implemented the recommendation.
G - 44
State of North Dakota
North Dakota State Agencies - Acronyms
Fiscal Years Ended June 30, 2020 and 2019
Acronym Agency
10100 Governor’s Office
10800 Secretary of State
11000 Office of Management and Budget
11200 Information Technology Department
11700 State Auditor’s Office
12000 State Treasurer
12500 Attorney General
12700 State Tax Commissioner
18000 State Courts
20100 Public Instruction
25000 State Library
25300 School for the Blind
27000 Career and Technical Education
30100 Health Department
30300 Environmental Quality
31300 Veterans' Home
32100 Veterans Affairs
32500 Human Services
36000 Protection and Advocacy
40100 Insurance Department
40500 Industrial Commission
40600 Labor Department
40800 Public Service Commission
41200 Aeronautics Commission
50400 Highway Patrol
53000 Department of Corrections and Rehabilitation
54000 Adjutant General
60100 Department of Commerce
60200 Department of Agriculture
67000 Racing Commission
70100 State Historical Society
II!
H - 1 | NORTH DAKOTA STATE AGNECIES - ACRONYMS
State of North Dakota
North Dakota State Agencies - Acronyms
Fiscal Years Ended June 30, 2020 and 2019
70900 Council on the Arts
72000 Game and Fish Department
75000 Parks and Recreation
77000 Water Commission
80100 Department of Transportation
BSC Bismarck State College
DSU Dickinson State University
LRSC Lake Region State College
MASU Mayville State University
MISU Minot State University
MISUB Dakota College at Bottineau
NDSCS North Dakota State College of Science
NDSU North Dakota State University
UND University of North Dakota
VCSU Valley City State University
WSC Williston State College
II!
H - 2 | NORTH DAKOTA STATE AGNECIES - ACRONYMS
2 019 C A F R
C O M PRE HE NSIVE A NNUA L FI NA NCIA L R EP ORT
F O R T H E F I S C A L Y E A R E N D E D J U N E 3 0 , 2 019
STATE OF NORTH DAKOTA
Comprehensive Annual
Financial Report
FOR THE FISCAL YEAR ENDED
June 30, 2019
Prepared by the Office of Management and Budget
State of North Dakota
Office of Management and Budget
Fiscal Management Division
600 East Boulevard Avenue Dept. 110
Bismarck, ND 58505-0400
701-328-2680
This CAFR is also available at our Fiscal Management website:
https://www.nd.gov/omb/agency/financial/comprehensive-annual-financial-report-cafr/cafr-reports
Cover: Photo on cover provided by North Dakota Tourism/National Park Service
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
Letter of Transmittal .....................................................................................................................................7
Certificate of Achievement for Excellence in Financial Reporting .............................................................13
North Dakota State Government Organization Chart ................................................................................14
List of Principal State Officials ...................................................................................................................15
FINANCIAL SECTION
Independent Auditor's Report ...........................................................................................................18
Management’s Discussion and Analysis ........................................................................................22
Basic Financial Statements:
Government-wide Financial Statements
Statement of Net Position ..........................................................................................................34
Statement of Activities ..............................................................................................................36
Statement of Net Assets – Component Units FASB Basis ........................................................38
Statement of Revenues, Expenses and Changes in Fund Net Assets –
Component Units FASB Basis ............................................................................................. 39
Governmental Fund Financial Statements
Balance Sheet............................................................................................................................40
Reconciliation of the Balance Sheet—Governmental Funds to the
Statement of Net Position .....................................................................................................41
Statement of Revenues, Expenditures, and Changes in Fund Balances..................................42
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances—Governmental Funds to the Statement of Activities ..............................43
Proprietary Fund Financial Statements
Statement of Net Position ..........................................................................................................44
Statement of Revenues, Expenses, and Changes in Fund Net Position ..................................46
Statement of Cash Flows ...........................................................................................................48
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position ..........................................................................................52
Statement of Changes in Fiduciary Net Position .......................................................................53
Component Unit Financial Statements
Combining Statement of Net Position ........................................................................................54
Combining Statement of Activities .............................................................................................55
Notes To The Financial Statements ..................................................................................................56
Required Supplementary Information Other Than Management’s Discussion and Analysis
Budgetary Comparison Schedule – General Fund ..........................................................................148
Budgetary Comparison Schedule – Budget to GAAP Reconciliation General Fund .......................149
Budgetary Comparison Schedule – Federal Funds .........................................................................150
Budgetary Comparison Schedule – Budget to GAAP Reconciliation Federal Fund .......................151
1
Page
Budgetary Comparison Schedule – State Funds.............................................................................152
Budgetary Comparison Schedule – Budget to GAAP Reconciliation State Fund ...........................153
Note to Required Supplementary Information – Budgetary Reporting ............................................154
Schedule of State’s Share of Net Pension Liability NDPERS .........................................................155
Schedule of State’s Contributions NDPERS ....................................................................................155
Schedule of State’s Share of Net Pension Liability HPRS ..............................................................156
Schedule of State’s Contributions HPRS .........................................................................................156
Schedule of State’s Share of Net Pension Liability JSND ...............................................................157
Schedule of State’s Contributions JSND .........................................................................................157
Schedule of State’s Share of Net Pension Liability TFFR ...............................................................158
Schedule of State’s Contributions TFFR .........................................................................................158
Schedule of State’s Share of OPEB Liability RHIC .........................................................................159
Schedule of State’s Contributions RHIC ..........................................................................................159
Schedule of Changes in Net Pension Liability and Related Ratios NDPERS .................................160
Schedule of Changes in Net Pension Liability and Related Ratios HPRS ......................................162
Schedule of Changes in Net Pension Liability and Related Ratios JSND .......................................164
Schedule of Changes in Net Pension Liability and Related Ratios TFFR .......................................166
Schedule of Changes to the Net Other Post Employment Benefit Liability and Related Ratios
Retire Health Insurance Credit Fund ..........................................................................................168
Schedule of Changes to the Net Other Post Employment Benefit Liability and Related Ratios
Met Life Insurance Plan ..............................................................................................................169
Schedule of Employer Contributions NDPERS ...............................................................................170
Schedule of Employer Contributions HPRS ....................................................................................170
Schedule of Employer Contributions JSND .....................................................................................171
Schedule of Employer Contributions TFFR .....................................................................................171
Schedule of Employer Contributions RHIC......................................................................................172
Information About the State’s Pension and Other Post Employment Benefit Plans........................173
Combining and Individual Fund Statements:
Combining Balance Sheet – Nonmajor Governmental Funds .........................................................181
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance –
Nonmajor Governmental Funds ...............................................................................................182
Combining Statement of Net Position – Nonmajor Enterprise Funds..............................................186
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position –
Nonmajor Enterprise Funds .....................................................................................................188
Combining Statement of Cash Flows – Nonmajor Enterprise Funds ..............................................190
Combining Statement of Net Position – Internal Service Funds ......................................................195
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position –
Internal Service Funds .............................................................................................................196
Combining Statement of Cash Flows – Internal Service Funds ......................................................197
Combining Statement of Fiduciary Net Position – Pension, Investment, and
Private-Purpose Trust Funds ...................................................................................................202
Combining Statement of Changes in Fiduciary Net Position – Pension, Investment,
and Private-Purpose Trust Funds ............................................................................................206
Combining Statement of Fiduciary Assets and Liabilities – Agency Funds .....................................209
Combining Statement of Changes in Assets and Liabilities – Agency Funds .................................210
2
STATISTICAL SECTION
Net Position by Component .....................................................................................................................217
Changes in Net Position...........................................................................................................................219
Fund Balances, Governmental Funds .....................................................................................................221
Changes in Fund Balances, Governmental Funds ..................................................................................223
Taxable Sales by Industry ........................................................................................................................225
Sales Tax Revenue Payers by Industry ...................................................................................................225
Ratios of Outstanding Debt by Type ........................................................................................................227
Pledged Revenue Coverage ....................................................................................................................229
Legal Debt Limit .......................................................................................................................................231
Demographic and Economic Indicators ...................................................................................................232
Principal Employers .................................................................................................................................233
Employment by Industry...........................................................................................................................233
Education Enrollment ...............................................................................................................................234
State Employees by Agency ....................................................................................................................235
Operating Indicators by Function .............................................................................................................237
Capital Assets by Function.......................................................................................................................238
Claims Development Information .............................................................................................................239
Agricultural Production .............................................................................................................................243
3
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4
State of North Dakota
Introductory Section
5
(This page left blank intentionally.)
6
NORTH
Dakota Be Legendary."'
Management
and Budget
December 11, 2019
To the Governor, Legislators and Citizens of the State of North Dakota:
In accordance with North Dakota Century Code (NDCC) section 54-44-04(14), we are pleased to submit the
Comprehensive Annual Financial Report (CAFR) of the State of North Dakota for the fiscal year ended June 30,
2019. This report has been prepared by the Office of Management and Budget. The financial statements contained
in the CAFR have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to
state and local governments, as promulgated by the Governmental Accounting Standards Board (GASB).
Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all
disclosures, rests with the state's management. To the best of our knowledge and belief, the information contained
in the CAFR is accurate in all material respects and reported in a manner that presents fairly the financial position
and results of operations of the State’s primary government and the component units for which it is financially
accountable. All disclosures necessary to enable the reader to gain an understanding of the State of North Dakota's
financial affairs have been included.
The state’s management is responsible for establishing and maintaining an internal control structure designed to
ensure that the assets of the government are protected from loss, theft or misuse and to ensure that adequate
accounting data are compiled to allow for the preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America. The internal control structure is designed to provide
reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance
recognizes that (1) the costs of a control should not exceed the benefits likely to be derived and (2) the valuation of
costs and benefits requires estimates and judgments by management.
In compliance with state statute, the Office of the State Auditor (SAO) audited the State’s financial statements. The
goal of the independent audit was to provide reasonable assurance that the financial statements of the State for the
fiscal year ended June 30, 2019 are free of material misstatement. The independent audit involved examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and evaluating the overall financial statement presentation. Their examination was conducted in
accordance with GAAP and the standards applicable to financial audits contained in Government Auditing Standards
as published by the Comptroller General of the United States. The SAO concluded, based upon the audit, that there
was a reasonable basis for rendering an unmodified opinion that the State’s financial statements for the fiscal year
ended June 30, 2019, are fairly presented in conformity with GAAP. The independent auditor’s report is presented
as the first component of the financial section of this report
The State of North Dakota is also required to undergo a single audit in conformity with the provision of the Single
Audit Act Amendments of 1996 and the Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (contained in Title 2 U.S. Code of Federal Regulations Part 200). Information
related to this single audit, including a schedule of expenditures of federal awards, the independent auditor's reports
on internal controls and compliance with applicable laws and regulations, and a schedule of findings and questioned
costs, are included in a separately issued biennial single audit report.
Management’s Discussion and Analysis (MD&A) immediately follows the Independent Auditor’s Report and provides
a narrative introduction, overview and analysis of the basic financial statements. This letter of transmittal is intended
to complement MD&A and should be read in conjunction with it.
600 E Boulevard Ave, Dept 110 | Bismarck, ND 58505-0400 | nd.gov/omb
DIRECTOR CENTRAL FACILITY FISCAL HUMAN RESOURCE RISK
& ADMINISTRATION SERVICES MANAGEMENT MANAGEMENT MANAGEMENT SERVICES MANAGEMENT
1600 E Century Ave, Suite 4
4th Floor | 14th Floor | 4th Floor | 4th Floor | 14th Floor | Bismarck, ND 58503
701.328.4904 701.328.2740 701.328.2471 7 701.328.2680 701.328.3293 701.328.7584
PROFILE OF THE GOVERNMENT
The State of North Dakota provides for a full range of services, including education, health and social
services, highway maintenance and construction, law enforcement, judicial, public safety, business regulation,
community and economic development, and natural resource development. The State’s reporting entity
reflected in the CAFR includes all the funds of the state as legally defined, as well as all of its component units
in conformity with the requirements of GASB Statement No. 61. Statement No. 61 provides that the financial
statements should emphasize the primary government and permit financial statement users to distinguish
between the primary government and its component units. Consequently, the transmittal letter, MD&A, and
the financial statements focus on the primary government and its activities. Although information pertaining to
the discretely presented component units is provided, their separately issued financial statements should be
read to obtain a complete overview of their financial position. The State’s reporting entity is described more
fully in Note 1A to the basic financial statements.
The State operates through a biennial appropriation, which represents agency appropriations recommended by
the governor and presented to the Legislative Assembly at the beginning of each legislative session. The budget
is legally required to be adopted through passage of appropriation bills by the Legislative Assembly and signed
by the governor. The governor has line item veto powers over all appropriations subject to legislative override.
Once passed and signed, the appropriation bill becomes the departments' financial plan for the next two years.
Changes to the appropriation are limited to Emergency Commission authorization, initiative, allotment, or
referendum action.
The State does not budget by fund nor does it formally budget revenues. The legal level of budgetary control is
at the agency, appropriation authority and expenditure line item level. The State's budgetary policies and
procedures are further explained in Note 1D on the notes to the basic financial statements.
LOCAL ECONOMY
Although North Dakota’s economy is increasingly diversified, the agricultural industry continues to play a key
role in the state’s economy. The USDA’s National Agricultural Statistics Service reports that for 2018 crop
production, North Dakota is the nation’s leading producer of durum wheat, spring wheat, canola, flaxseed, oats,
dry edible beans and peas, navy beans, pinto beans and honey. North Dakota also ranked second in the
production of black beans, lentils, and sunflowers.
The energy industry plays an important role in the state’s economy. The development of wind and coal
resources, the production of ethanol and bio-diesel, and oil and natural gas extraction all contribute to the state’s
economy. North Dakota reached an all-time high for oil production which averaged over 1.48 million barrels of
oil produced per day in August 2019. North Dakota’s current crude oil production ranks second in the nation,
behind first-ranked Texas. Oil prices have rebounded significantly from the 2016 lows when North Dakota
producers were receiving prices below $25 per barrel. Prices have averaged around $50 per barrel at the start
of the 2019-21 biennium. In September 2019, the actual average price per barrel for North Dakota oil was
$50.25, slightly over the estimated price of $48.50 used for budgeting purposes. The long-term outlook remains
strong for oil globally as well as here in North Dakota.
According to the United States Census Bureau, the state’s estimated population for 2018 was approximately
760,000 people, which is an all-time high. Health care and social assistance jobs account for nearly 21% of the
employment in the state. Other leading areas of employment are retail trade, educational services, construction
and manufacturing. The unemployment rate for the state in October 2019 was 2.5%, compared to 3.6% for the
United States.
A listing of the state’s 20 largest employers demonstrates the diversity of the economy. Top employers include:
the U.S. military, the state university system, health care providers, manufacturers, financial and insurance
companies, information technology companies, energy producers, and retail companies.
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Despite uncertainty within international markets, North Dakota achieved positive export growth in 2018. The
United States Census Bureau showed that North Dakota’s exports were up overall by $1 billion for a total of
$6.8 billion in 2018. This represents an increase of 16.2% over 2017.
LONG-TERM FINANCIAL PLANNING
The long-term financial plan for the state of North Dakota was outlined by Governor Burgum as part of the 2019-
21 executive budget address, presented to the legislature in December 2018. The Governor’s long-term
financial plan includes the following key components:
x Balancing ongoing revenues and expenses of state government
x Rebuilding reserves.
x Ensuring solvency for the state pension fund.
North Dakota is required by its Constitution to have a balanced budget. However, ongoing revenues and
ongoing expenses have not always been in balance. In those instances where ongoing revenues did not meet
the obligations of ongoing expenses of state government, one-time transfers from accumulated reserves and
fund balances were used to fill the gap. In nearly all cases, those accumulated reserves and fund balances
were directly attributable to oil and natural gas extraction and production tax revenue. In the 2019-21 biennium
executive budget, the governor laid out a financial plan that not only balanced ongoing revenues and expenses
but did so by adding transparency to the use of oil tax revenue. In the executive budget, the state general fund
allocation of oil and gas taxes increased from $400 million to $1 billion per biennium, but no additional transfers
from accumulated fund balances were proposed. Both the 2013-15 and 2015-17 biennium budgets included
general fund revenues and transfers in excess of $1 billion that were directly funded from oil and gas tax
revenue.
The legislature did not approve the proposed transfer of $1 billion per biennium from oil tax revenues to the
general fund, opting to continue it at the level of $400 million per biennium. The legislature instead chose to
balance the general fund budget with transfers from accumulated oil tax revenues. Although this approach
provides less transparency and obscures the state’s ongoing revenue and expense structure, it ensures overall
revenue sources are adequate to fund ongoing government expenses. It provides a conservative approach to
funding the budget as the accumulated balances transferred to the general fund are balances on hand at the
start of the biennium and not dependent on forecasted tax revenues.
The state’s rainy-day fund, the Budget Stabilization Fund, was nearly depleted during the 2015-17 biennium
economic downturn. The 2019-21 executive budget proposed to fully replenish this fund to its maximum balance
allowed by law, which is 15% of general fund appropriations. This included a proposed transfer of over $300
million from the Strategic Investment and Improvements Fund. A critical component of ensuring the long-term
financial well-being of the state of North Dakota is a well-funded Budget Stabilization Fund that provides a
necessary buffer against volatile commodity prices that drive ups and downs in the state’s economy.
The legislature did not approve the transfer of $300 million to the Budget Stabilization Fund. However, the
revenue forecast adopted by the legislature proved so conservative that actual revenues ended the biennium
$250 million higher than predicted. North Dakota law requires any end of biennium balance in the general fund
in excess of $65 million to be transferred to the Budget Stabilization Fund. As a result, $548 million was
transferred to the Budget Stabilization Fund, pushing the balance above $660 million. It is expected to reach its
$726 million cap by the end of the 2019-21 biennium.
Another component of the state’s long-term financial plan is ensuring the solvency of the state’s pension fund.
The governor proposed restoring solvency to the fund through a combination of policy proposals that reformed
the benefit and funding structure, along with a one-time cash infusion into the fund. The proposed one-time
cash infusion was a transfer of $265 million at the beginning of the 2019-21 biennium from the Strategic
Investment and Improvements Fund to the Public Employees Retirement Fund.
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Although the legislature did not approve the proposed cash infusion of $265 million, the legislature did adopt
separate proposals that reformed the benefit structure and had a positive impact on the long-term actuarial
projections for the fund.
The backbone of the state’s financial plan is a revenue forecasting process that is accurate, conservative, and
credible. The state utilizes a Revenue Forecasting Advisory Committee, comprised of representatives of the
major industries in the state and the legislative and executive branches of government, along with the expertise
of a national economic forecasting consultant. With the assistance of these experts, the state’s Tax Department
and Office of Management and Budget develop a conservative revenue forecast for use in the budgeting
process.
The budgeting process begins with the development of a biennial budget proposal reflecting the Governor’s
priorities for the next two years. The budget is submitted to the legislature for their consideration and eventual
enactment. With a biennial budget cycle, each revenue forecast and budget proposal provides a three-year plan
for the revenues and expenditures of state government.
RELEVANT FINANCIAL POLICIES
North Dakota’s financial policies ensure that in the event of an economic downturn, North Dakota state
government will be able to continue to provide its citizens with necessary services. Should North Dakota
experience a significant revenue shortfall, the state is able to access funds in the budget stabilization fund. The
statutory maximum balance for the budget stabilization fund is 15.0 percent of the state general fund budget.
North Dakota experienced a significant revenue shortfall during the 2015-17 biennium due to decreases in oil
and agriculture prices, resulting in a transfer of nearly the entire balance of the budget stabilization fund to the
general fund prior to June 30, 2017. The 2017 legislature established an ongoing allocation of $75 million per
biennium from oil and gas tax revenues to the budget stabilization fund. North Dakota Century Code requires
the transfer to the budget stabilization fund of any end-of-biennium general fund balance in excess of $65
million. The 2017-19 biennium ended with revenues exceeding the forecast and resulted in the transfer of $548
million to the budget stabilization fund. The balance of the budget stabilization fund is estimated to be over
$726 million by June 30, 2021 due to a combination of existing fund balance and additional oil tax revenue
allocations.
In addition to accessing the budget stabilization fund, in the event of an economic downturn the Governor can
reduce general fund expenditure authority uniformly across state agencies through a process known as
allotment. In the event of an allotment, the foundation aid stabilization fund was established to protect the state
school aid program. Dollars from this fund would replace the amount of general fund dollars allotted, thus K-12
education would not experience a reduction in funding. The passage of Measure 2 in the 2016 general election
allowed money in the fund to be appropriated for education-related purposes. Funding for the foundation aid
stabilization fund comes from 10 percent of oil extraction tax collections. The foundation aid stabilization fund
is expected to have a June 30, 2021 balance in excess of $443 million.
MAJOR INITIATIVES
Major initiatives proposed by Governor Doug Burgum and approved by the legislature for the 2017-19 biennium
include:
x Investing in infrastructure and in other priorities;
x Continued funding of Medicaid expansion;
x Investing in behavioral health issues; and
x Transitioning the cost of county social services to the state.
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INFRASTRUCTURE INVESTMENTS
The 2017-19 biennial budget includes funding to rebuild and repair roads throughout the state, for water supply
and flood control, and grants for airports. Funding for infrastructure improvements includes:
x $612.9 million to rebuild and repair state highways;
x $97.1 million for city road projects;
x $51.1 million dedicated to the repair and rebuilding of county and township roads;
x $40 million in grant funds to two communities in oil country for airports; and
x $722.2 million for water-related projects, including $120.1 million for water supply, $27.0 million for rural
water supply, $136.0 million for flood control and $15.8 million for general water projects.
TAX RELIEF
The legislature approved, and the Governor signed into law, a tax relief package that provides:
x $160.7 million for a state-paid economic assistance and social services pilot program for the 2017-19
biennium;
x $23.3 million to continue state funding for certain county costs of child welfare and service payments for
elderly and disabled services; and
x $14.8 million for the homestead tax credit program; and
x $8.1 million for the disabled veteran’s property tax credit.
EDUCATION
K-12 education initiatives include:
x $1.94 billion in state funding for K-12 schools through integrated funding formula;
x $6 million in grants to districts experiencing rapid enrollment growth;
x $55.4 million to assist districts in the provision of transportation services;
x $19.3 million to go towards special education contracts; and
x Almost $33 million will be provided to schools during the 2017-19 biennium to support CTE offerings,
providing more educational opportunities for students and important job skills for those students entering
the workforce.
Higher Education initiatives include:
x $15.2 million for UND Medical School Residency Programs.
x $ 2.0 million in state funding to continue the North Dakota Higher Education Challenge Grant Program,
to encourage philanthropy by providing a state match for private contributions to the state’s colleges and
universities.
x $168.5 million is slated to be invested for capital projects across the system, with funding from revenue
bonds and private donations.
x $22.5 million in bonding authority to construct an Integrated Carbon Plant at Valley City State University
RESERVES
It is anticipated that by June 30, 2019, there will be a total ending balance of approximately $1.58 billion in the
budget stabilization fund, foundation aid stabilization fund, strategic investment and improvements fund, and
tax relief fund. The general fund budget for the 2017-19 biennium totals $4.31 billion.
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AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the State of North Dakota for its comprehensive annual
financial report for the fiscal year ended June 30, 2018. This was the 27th consecutive year that the government
has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must
publish an easily readable and efficiently organized comprehensive annual financial report. This report must
satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive
annual financial report continues to meet the Certificate of Achievement Program’s requirements, and we are
submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the State of North Dakota received the GFOA’s Award for Distinguished Budget Presentation for its
2017-2019 budget. In order to qualify for the Distinguished Budget Presentation Award, the State’s budget
document was judged to be proficient in several categories, including policy documentation, financial planning,
and organization.
This report was prepared by staff members of the Fiscal Management Division of the Office of Management
and Budget. Their dedication and efforts are greatly appreciated. We also extend our gratitude to the numerous
individuals from virtually all the state agencies and institutions, especially the Office of the State Auditor, for
their assistance.
Sincerely,
Joe Morrissette
Director
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
State of North Dakota
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2018
Executive Director/CEO
13
STATE OF NORTH DAKOTA ORGANIZATIONAL CHART
The
Electorate
Legislative Executive Judicial
Legislature Superintendent Commissioner Attorney State State Governor Lieutenant Commissioner Secretary State Tax Public Supreme
of Public of General Auditor Treasurer Governor of of Commissioner Service Court of
Instruction Insurance Agriculture State Commission North
Dakota
Legislative Governing Trial Courts
Council & Boards &
Committees Commissions
State
Agencies
Ag/Commerce Education General Health & Transportation Natural Res. Public Safety Regulatory University
Government Human Services & Recreation & Corrections Agencies System
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NORTH DAKOTA
PRINCIPAL STATE OFFICIALS
June 30, 2019
ELECTED OFFICIALS
Doug Burgum, Governor
Brent Sanford, Lieutenant Governor
Alvin A. Jaeger, Secretary of State
Wayne Stenehjem, Attorney General
Julie Fedorchak, Public Service Commissioner
Randel Christmann, Public Service Commissioner
Brian Kroshus, Public Service Commissioner
Doug Goehring, Commissioner of Agriculture
Josh Gallion, State Auditor
Jon Godfread, Commissioner of Insurance
Kirsten Baesler, Superintendent of Public Instruction
Ryan Rauschenberger, Tax Commissioner
Kelly Schmidt, State Treasurer
LEGISLATIVE
Lawrence R. Klemin, Speaker of the House
Chet Pollert, House Majority Leader
Joshua A. Boschee, House Minority Leader
Lt. Gov. Brent Sanford, President of the Senate
Rich Wardner, Senate Majority Leader
Joan Heckaman, Senate Minority Leader
JUDICIAL
Gerald W. VandeWalle, Chief Justice, North Dakota Supreme Court
Daniel J. Crothers, Justice
Lisa K Fair McEvers, Justice
Jerod Tufte, Justice
Jon Jensen, Justice
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16
State of North Dakota
Financial Section
17
STATE AUDITOR PHONE
Joshua C. Gallion 70 I -326-224 l
FAX
701-328-2345
STATE OF NORTH DAKOTA
www.na gov/auditor O FFICE OF THE STATE AUDITOR
STATE CAPITOL
ndsOO"" nd .gov
600 E Boulevard Ave Dept I 17
Bi,mar::f North Dckolo, 58505
Independent Auditor's Report
The Honorable Doug Burgum, Governor Members of the Legislative Assembly
of the State of North Dakota of the State of North Dakota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major fund ,
and the aggregate remaining fund information of the State of North Dakota as of and for the year
ended June 30, 2019, and the related notes to the financial statements, which collectively
comprise the State's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit We
did not audit the financial statements of the following state entities and discretely presented
component units:
Addiction Counselor Internship Loan Job Service North Dakota
Program Mandan Remediation Trust
Bank of North Dakota Medical Facility Infrastructure Loan Program
Beginning Farmer Revolving Loan Fund PACE and AG PACE Funds
Building Authority Public Employees Retirement System
College SAVE Public Finance Authority
Community Water Facility Loan Fund Rebuilders Loan Program
Comprehensive Health Association of Retirement and Investment Office
North Dakota School Construction Assistance Revolving
Department of Trust Lands Loan Fund
North Dakota Development Fund State Fair Association
Guaranteed Student Loan Program State Historical Society of North Dakota
Housing Finance Agency Foundation
Housing Incentive Fund Student Loan Trust
Infrastructure Revolving Loan Fund Workforce Safety and Insurance
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The financial statements of the above entities reflect total assets, net position or fund balance,
and revenues of the government-wide financial statements and fund financial statements as
follows:
Percent of Percent of Net Percent of
Assets Position or Revenues
Fund Balance
Government-Wide Financial
Statements
Governmental Activities 29% 30% 18%
Business-Type Activities 82% 61% 51%
Aggregate Discretely Presented
Component Units 100% 100% 100%
Fund Financial Statements
Major Governmental Funds
General Fund 0% 0% 0%
Federal Fund 1% 0% 1%
State Special Revenue Fund 74% 76% 46%
Major Enterprise Funds
Bank of North Dakota 100% 100% 100%
Housing Finance Agency 100% 100% 100%
University System 0% 0% 0%
Workforce Safety and Insurance 100% 100% 100%
Aggregate Remaining Fund
Statements 94% 97% 76%
The financial statements for these entities were audited by other auditors whose reports have
been furnished to us, and our opinions, insofar as they relate to the amounts included for these
entities, are based solely on the reports of the other auditors. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement. The financial statements of the North Dakota University System's
discretely presented component units (foundations) were not audited in accordance with
Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
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Opinions
In our opinion, based on our audit and the report of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, the business-type activities, the aggregate discretely presented
component units, each major fund , and the aggregate remaining fund information of the State of
North Dakota, as of June 30, 2019, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America .
Emphasis of Matter
As discussed in Note 2 to the financial statements, the 2019 financial statements have been
restated to correct misstatements. Our opinion is not modified with respect this matter.
As discussed in Note 2 to the financial statements, Housing Finance changed its method of
accounting for bond premiums and discounts from the straight-line method to the effective interest
rate method. Our opinion is not modified with respect to this matter.
The actuary for the North Dakota Public Employees Retirement System has determined that the
Fund's unfunded actuarial accrued liability is approximately $1 .187 billion as of July 1, 2019.
The funding for the actuarial accrued liability is predicated on employer and employee funding
rates mandated by North Dakota statutes. The actuary has determined that the current statutory
rates are insufficient compared to the actuarially determined contribution rate needed to fund
the actuarial accrued liability. Note 6 identifies the net pension liability as calculated using
GASS 67 and 68 requirements. Our opinion is not modified with respect to this matter.
As discussed in Note 17 to the basic financial statements, the Bank of North Dakota elected to
present an unclassified statement of net position because current assets are not matched with
current liabilities. Presentation of a classified statement of net position would give the false
impression that there is a liquidity problem at the bank. Presentation of a classified statement of
net position for the Bank of North Dakota would be misleading to the extent that the financial
statements may be materially misstated. Our opinion is not modified with respect to this matter.
As described in Note 22 to the financial statements, the State of North Dakota adopted the
provisions of GASB 83 Certain Asset Retirement Obligations and GASS 88 Certain Disclosures
Related to Debt, Including Direct Borrowings and Direct Placements. Our opinion is not modified
with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison schedules and related
reconciliations and notes, information about the state of North Dakota's pension plans and other
post-retirement benefits, as listed in the table of contents be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
20
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the State of North Dakota's basic financial statements. The combining and
individual fund financial statements listed in the table of contents are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual fund financial statements listed in the table of contents is the
responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the combining and individual fund financial statements and schedules
listed in the table of contents are fairly stated, in all material respects , in relation to the basic
financial statements as a whole .
The introductory and statistical sections, as listed in the table of contents have not been subjected
to the auditing procedures applied in the audit of the basic financial statements, and accordingly,
we do not express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 11 , 2019 on our consideration of the State of North Dakota's internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts , and grant agreements and other matters. The purpose of that report is solely to
describe the scope of our testing of internal control over financial reporting and compliance and
the results of that testing , and not to provide an opinion on the effectiveness of the State of North
Dakota's internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards in considering the State
of North Dakota's in ernal control over financial reporting and compliance.
I
21
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the State of North Dakota’s (the State’s) Comprehensive Annual Financial Report presents
a discussion and analysis of the State’s financial performance, providing an overview of the activities for
the fiscal year ended June 30, 2019. Please read it in conjunction with the transmittal letter at the front of
this report and with the State's financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
Government-wide:
Total assets and deferred outflows of resources of the State exceeded its liabilities and deferred inflows of
resources at fiscal year-end by $24.7 billion (reported as net position), an increase of $2.3 billion from the
previous year. The net position of governmental activities increased by 11.4% while the net position of the
business-type activities showed an increase of 5.2%.
As a result of implementing GASB Statement 68, Accounting and Financial Reporting for Pensions, the
State recorded $27.5 million net pension asset, $380.3 million deferred outflows of resources, $887.5 million
net pension liability, and $82.5 million deferred inflows of resources for the primary government. The State
had a slight increase in net pension liability during the year of $24.6 million or 2.9%.
Fund Level:
As of the close of fiscal year 2019 the State’s governmental funds reported combined ending fund balances
of $15.7 billion, an increase of $1.96 billion. Of this amount, $108.4 million is non-spendable, primarily for
Permanent Trust Funds. Spendable fund balance consists of $6.5 billion restricted for specific purposes
such as common schools, highway projects, and state education aid, $1.5 billion committed and $374.6
million assigned for specific functional expenditures such as education and health and human service
operations, with the unassigned fund balance making up the remaining amount of $7.2 billion, which is
primarily made up of the legacy fund with a balance of $6.2 billion.
The enterprise funds reported net position at year-end of $4.1 billion, an increase of $201.8 million during
the year.
Long-term Debt:
The State’s total debt (bonds, certificates of participation, and notes payable) increased approximately 7.8%
during the fiscal year to $2.8 billion, an increase of $200 million, which represents the net difference
between new issuances and payments. During the year the State issued $389 million in bonds, $97 million
in certificates of participation, and $6.4 billion in notes.
More detailed information regarding these activities and funds is included in Note 3L.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is an introduction to the State’s basic financial statements, which consists of
three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to
the financial statements. This report also contains other supplementary information in addition to the basic
financial statements.
Government-wide Statements
The government-wide financial statements provide a broad view of the State’s operations in a manner
similar to a private-sector business. The statements provide both short-term and long-term information
about the State’s financial position, which assists in assessing the State’s economic condition at the end of
the fiscal year. These statements include all non-fiduciary assets, deferred outflows of resources, liabilities,
and deferred inflows of resources using the accrual basis of accounting. The current year’s revenues and
expenses are taken into account regardless of when cash is received or paid.
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The Statement of Net Position presents all of the State’s assets, deferred outflows of resources, liabilities,
and deferred inflows of resources, with the difference between the two reported as “net position”. Over time,
increases and decreases in net position is an indicator of whether the State’s financial position is improving
or deteriorating.
The Statement of Activities presents information showing how the State’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying events giving
rise to the change occur, regardless of the timing of related cash flows. Therefore, revenues and expenses
are reported in these statements for some items that will only result in cash flows in future fiscal periods
(e.g., uncollected taxes and earned but unused vacation leave).
Both statements report three activities:
Governmental Activities – The activities in this section are primarily supported by taxes and
intergovernmental revenue. Most of the State’s basic services, such as education, health and human
services and transportation, are reported under this category.
Business-type Activities – These functions are intended to recover all or a significant portion of their costs
through user fees and charges to external users of goods and services. The Bank of North Dakota, Housing
Finance Agency and the University System are examples of the State’s business-type activities.
Discretely Presented Component Units – These are operations for which the State has financial
accountability but they have certain independent qualities as well. These entities operate similar to private-
sector business and the business-type activities described above. The State has 5 discretely presented
component units. Financial information for these entities is presented separately from the financial
information presented for the primary government.
The government-wide financial statements can be found immediately following this discussion and analysis.
Fund Financial Statements
A fund is a fiscal and accounting entity with a self-balancing set of accounts that the State uses to keep
track of specific sources of funding and spending for a particular purpose. The State, like other state and
local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal
requirements.
The basic fund financial statements begin after the Component Unit FASB basis statements and provide
more detail about the major individual funds. The State's funds are divided into three categories –
governmental, proprietary, and fiduciary. It is important to note that these fund categories use different
accounting approaches and should be interpreted differently.
Governmental funds - Most of the State's basic services are reported in the governmental funds.
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, the governmental fund financial statements focus on the near-term inflows and outflows of
spendable resources. They also focus on the balances left at year-end that are available for future
spending. Such information may be useful in evaluating whether there are more or fewer financial resources
that can be spent in the near future to finance the State's programs. These funds are reported using
modified accrual accounting, which measures cash and all other financial assets that can readily be
converted to cash.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar information
presented for governmental activities in the government-wide financial statements. By doing so, readers
may better understand the long-term impact of the government’s near-term financing decisions. Both the
governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds
23
and the governmental activities. These reconciliations are presented on the page immediately following
each governmental fund financial statement.
Governmental funds include the General Fund, special revenue, debt service, and permanent funds. The
State has several governmental funds, of which three (3) are considered major individual funds. These
three are the General Fund, the Federal Fund, and the State Special Revenue Fund. Each of these major
funds is presented in a separate column in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures and changes in fund balance. The remaining governmental funds
are combined in a single aggregated column on the basic fund statements. Individual fund data for each of
these non-major governmental funds can be found in the other supplementary information section of this
report.
Proprietary funds – Services for which the State charges customers a fee are generally reported in
proprietary funds. The state maintains two different types of proprietary funds, enterprise funds and internal
service funds. Enterprise funds report activities that provide supplies and services to the general public.
Internal service funds report activities that provide supplies and services for the State's other programs and
activities. Like the government-wide statements, proprietary funds use the accrual basis of accounting.
Although the basis of accounting is the same for the government-wide and proprietary fund statements,
reconciliation between these statements is presented because of the allocation of internal service funds’
net income.
The State has four (4) major enterprise funds: The Bank of North Dakota, Housing Finance, University
System, and Workforce Safety and Insurance. These four funds are each presented in separate columns
on the basic proprietary fund financial statements. The remaining enterprise funds are combined in a single
total column on these statements. Individual fund data for each of the non-major enterprise funds can be
found in the other supplementary information section of this report.
The State’s internal service funds are reported as governmental activities on the government-wide
statements, because the services they provide predominantly benefit governmental activities. The State’s
four (4) internal service funds are reported on the basic proprietary fund financial statements in a single
combined column. Individual fund data for the internal service funds is provided in the form of combining
statements found in the other supplementary information section of this report.
Fiduciary funds - The State acts as a trustee, or fiduciary, for its employee pension plans. It is also
responsible for other assets that, because of a trust arrangement, can be used only for the trust
beneficiaries. The State's fiduciary activities are reported in separate Statements of Fiduciary Net Position
and Changes in Fiduciary Net Position. These funds, which include pension (and other employee benefit)
trust, investment trust, private-purpose trust, and agency funds, are reported using accrual accounting. The
government-wide statements exclude fiduciary fund activities and balances because the State cannot use
these assets to finance its operations.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and the fund financial statements. The notes to the financial statements can be found
immediately following component units’ financial statements.
Required Supplementary Information
The basic financial statements are followed by a section of required supplementary information. This section
includes a budgetary comparison schedule, which includes reconciliation between the statutory fund
balances for budgetary purposes and the fund balances for the General Fund, the Federal Fund and the
State Special Revenue Fund as presented in the governmental fund financial statements. In addition, the
required supplementary information includes up to ten years of information on the State’s pension and
Other Post Employment Benefit (OPEB) plans, including schedules on the employer proportionate share
of the net pension liability and net OPEB liability, changes in the net pension liability and OPEB liability, and
employer contributions.
24
Other Supplementary Information
Other supplementary information includes combining financial statements for non-major governmental,
non-major enterprise, internal service, and fiduciary funds. These funds are added together, by fund type,
and presented in single columns in the basic financial statements.
FINANCIAL ANALYSIS OF THE GOVERNMENT AS A WHOLE
As noted previously, net position may serve over time as a useful indicator of a government’s financial
position. The State’s combined net position (governmental and business-type activities) totaled $24.7 billion
at the end of fiscal year 2019. Net position increased $2.3 billion from the prior fiscal year.
State of North Dakota's Net Position
(Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2019 2018 2019 2018 2019 2018
Current and Other Assets $16,972,671 $14,981,436 11,346,654 $10,822,219 25,434,033 $22,897,146
Capital Assets 5,237,060 5,027,823 1,631,300 1,528,012 6,868,360 6,555,834
Total Assets 22,209,731 20,009,259 12,977,954 12,350,231 32,302,393 29,452,980
Deferred Outflows of
Resources 293,718 330,883 114,216 121,445 407,934 452,328
Long-Term Liabilities
Outstanding 798,562 796,635 4,245,686 3,966,548 5,044,248 4,763,183
Other Liabilities 1,029,509 984,009 4,687,353 4,564,120 2,831,570 2,641,620
Total Liabilities 1,828,071 1,780,644 8,933,039 8,530,668 7,875,818 7,404,803
Deferred Inflows of Resources 63,215 43,280 35,002 23,066 98,217 66,346
Net Position
Net Investment in
Capital Assets 5,185,682 4,988,839 1,246,741 1,214,133 6,432,423 6,202,972
Restricted 6,639,786 6,355,103 972,887 924,611 7,612,673 7,279,713
Unrestricted 8,786,695 7,172,276 1,904,501 1,779,198 10,691,196 8,951,474
Total Net Position $20,612,163 $18,516,218 $4,124,129 $3,917,942 24,736,292 $22,434,159
The largest component (43%) of the State’s net position is unrestricted net position. Unrestricted net
position may be used at the State’s discretion, but often have limitations on use based on State statutes.
Restricted net position makes up thirty-one percent (31%) of the state’s net position. Restricted net position
represents resources that are subject to external restrictions, constitutional provisions, or enabling
legislation on how they can be used.
Twenty-six percent (26%) of the State’s net position reflects its investment in capital assets such as land,
buildings, equipment, intangibles (software), and infrastructure (roads, bridges and other immovable
assets) less any related debt outstanding that was needed to acquire or construct the assets. The State
uses these capital assets to provide services to citizens; consequentially, these assets are not available for
future spending. Although the State’s investment in its capital assets is reported net of related debt, it should
be noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
The condensed financial information below was derived from the government-wide Statement of Activities
and reflects how the State’s net position changed during the fiscal year:
25
State of North Dakota's Changes in Net Position
(Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2019 2018 2019 2018 2019 2018
Revenues:
Program Revenues:
Charges for Services 378,032 $344,920 1,854,857 $1,890,738 2,232,889 $2,235,658
Operating Grants & Contributions 2,121,703 2,156,382 410,791 363,266 2,532,494 2,519,648
Capital Grants & Contributions 107 95 19,926 4,769 20,033 4,864
General Revenues:
Income Taxes 604,088 452,793 - - 604,088 452,793
Sales Taxes 1,435,130 1,326,249 - - 1,435,130 1,326,249
Oil, Gas and Coal Taxes 2,586,570 2,196,877 - - 2,586,570 2,196,877
Other Taxes 110,715 100,127 - - 110,715 100,127
Investment Earnings 360,264 380,165 - - 360,264 380,165
Tobacco Settlement 20,752 55,305 - - 20,752 55,305
Other 231,745 163,996 5,162 2,922 236,907 166,918
Total Revenues 7,849,106 7,176,909 2,290,736 2,261,695 10,139,842 9,438,604
Expenses
General Government 1,183,234 1,034,864 - - 1,183,234 1,034,864
Education 1,238,989 1,208,514 - - 1,238,989 1,208,514
Health and Human Services 1,947,263 1,930,265 - - 1,947,263 1,930,265
Regulatory 61,213 60,782 - - 61,213 60,782
Public Safety and Corrections 230,667 241,144 - - 230,667 241,144
Agriculture and Commerce 99,247 95,412 - - 99,247 95,412
Natural Resources 261,308 230,195 - - 261,308 230,195
Transportation 443,629 444,530 - - 443,629 444,530
Interest on Long Term Debt 1,952 2,503 - - 1,952 2,503
Bank of North Dakota - - 98,931 86,073 98,931 86,073
Housing Finance - - 52,715 46,083 52,715 46,083
Loan Programs - - 12,666 13,320 12,666 13,320
State Lottery - - 26,175 23,215 26,175 23,215
Unemployment Compensation - - 84,206 115,487 84,206 115,487
University System - - 1,198,989 1,178,669 1,198,989 1,178,669
Workforce Safety and Insurance - - 297,497 270,197 297,497 270,197
Other - - 594,491 632,912 594,491 632,912
Total Expenses 5,467,502 5,248,209 2,365,670 2,365,956 7,833,172 7,614,165
Increase (decrease) in Net
Position Before Contributions,
Loss & Transfers 2,381,604 1,928,700 (74,934) (104,261) 2,306,670 1,824,439
Contributions to Permanent Fund
Principal 11,014 4,393 - - 11,014 4,393
Transfers (290,718) (367,497) 277,019 285,002 (13,699) (82,495)
Change in Net Position 2,101,900 1,565,596 202,085 180,741 2,203,985 1,746,337
Net Position - Beginning 18,516,218 16,973,696 3,917,941 3,744,940 22,434,159 20,718,636
Prior Period Adjustment * (5,955) (23,074) 4,103 (7,740) (1,852) (30,814)
Net Position- Ending $20,612,163 $18,516,218 $4,124,129 $3,917,941 $24,736,292 $22,434,159
* More detailed information regarding the prior period adjustments can be found in Note 2.
26
Governmental Activities
Governmental Activities increased the State’s net position by $2.1 billion. Revenues increased 9.4%, with
the largest dollar increase in the State’s revenues for fiscal year 2019 coming from oil, gas, and coal, taxes,
an increase of $390 million. The increase in sales and use tax is due to growth in taxable sales and
purchases as a result of a strong economy and the taxation of internet sales as a result of the US Supreme
Court decision. Corporation and Individual Income Tax both increased showing growth in the economy,
growth in oil activity, and increased wages and salaries. Oil and Gas production tax and Oil Extraction tax
increased due to strong oil prices leading to production growth.
Expenses for governmental activities remained relatively consistent.
The following chart depicts revenues of the governmental activities for the fiscal year:
Revenues - Governmental Activities
Fiscal Year Ending June 30, 2019
Capital Grants &
Operating Grants & Contributions
Contributions 0.001%
27.031% Unres. Investment
Earnings
4.590%
Charges for Services
4.816%
Other
2.953% General Taxes
60.345%
Tobacco Settlement
0.264%
The chart on the following page depicts expenses of the governmental activities for the fiscal year:
27
Expenditures - Governmental Activities
Fiscal Year Ending June 30, 2019
Natural Resources
4.78% Education
22.66%
Interest on Long Term Agriculture and
Debt Commerce
0.04% 1.82%
General Government
21.64%
Health and Human
Services
35.61%
Transportation
Regulatory 8.11%
1.12% Public Safety and
Corrections
4.22%
Business-type Activities
Net position of the business-type activities increased by $202 million during the fiscal year.
Workforce Safety and Insurance’s (WSI) net position increased $89.4 million. Policyholder count increased
by 319 policies in fiscal year 2019. WSI’s financial position remains stable. Earned premium net of discounts
and reinsurance totaled $238 million, $232 million, and $233 million for fiscal years 2019, 2018, and 2017,
respectively. WSI re-entered the Securities Lending arena in fiscal year 2016. Total income for fiscal year
2019 was $145 thousand, compared to fiscal year 2018 which had earnings of $200 thousand with related
expense of $40 thousand. Total claims filed for fiscal year 2019 totaled 19,913. This is an increase of 83
from previous fiscal year 2018 total of 19,830. A strong investment return in the past three years has
contributed to the positive change in net position.
The Bank of North Dakota net position increased $27.6 million. The loan portfolio decreased by $332,000
to $4.5 million at December 31, 2018. Total assets increased by .2% to $7 million. The increase was largely
attributable to investment purchases offset by the sale of federal student loan portfolio. Interest-bearing
deposits totaled $4.2 billion at December 31, 2018 compared to $4.1 billion at December 31, 2017. This
fluctuation is due to state deposits and the economic status of the state. The Bank has a tier one capital
leverage ratio of 12.48% as of December 31, 2018. The leverage ratio is a measure of strength. Well
capitalized per federal regulations requires this percentage to be a minimum of 5%.
The University System’s net position increased $8.5 million. Net position increased due to a 3% increase
in grants and contracts and a 7% increase in total assets. Increases in non-current assets was due primarily
to an increase of $45.1 million in other long-term investments as well as an increase of $37.8 million in
restricted cash which represents unspent certificate of participation proceeds for the new steam plant and
infrastructure improvements at UND.
Housing Finance net position increase of $12.1 million as a result of the year’s program operations and
financing activities. Included in this number is an increase in the prior year’s net position of $4.1 million due
to a prior period adjustment with regards to implementing the effective interest method in amortizing bond
premium.
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FINANCIAL ANALYSIS OF THE STATE’S FUNDS
Governmental Funds
As the State completed the year, its governmental funds reported combined fund balances of $15.7 billion,
an increase of $2 billion from the prior fiscal year. Of the $15.7 billion in net position, $108 million is non-
spendable, $6.5 billion is restricted, $1.5 billion is committed, $375 million is assigned, and $7.2 billion is
unassigned. These fund balance categories are a result of GASB Statement 54. Note 1U provides
definitions for these categories. The following analysis of funds provides the explanation for the overall
change in net position for governmental funds.
The General Fund is the chief operating fund of the State. At the end of current fiscal year, unassigned fund
balance of the General Fund was $7.2 billion, non-spendable was $6.6 million, $279 thousand was
restricted, and $348 million was committed for expenditure by various governmental functions.
Total General Fund balance increased during the fiscal year by $917 million. Revenues decreased
approximately 7.6%, largely due to a decrease in oil, gas, and coal taxes of $477 million. Increases of
revenue were individual and corporate income tax of $135 million and sales and use tax of $121 million.
As there was a slight decrease in the general fund revenues, revenues for the overall state had increased
and was previously explained with the increase in net position for governmental activities.
General fund expenditures remained relatively consistent with a slight overall decrease of $2 million.
The State Special Revenue ending fund balance increased by $1 billion resulting in $8.1 billion fund
balance. Revenues increased by 38.5% in the state special revenue fund primarily due to an increase in
oil, gas, and coal taxes due to strong oil prices leading to production growth as previously discussed.
Special fund expenditures increased by 6.4% primarily due to an increase in Health and Human Services
spending, as they received additional funding for Medicaid expansion in their special fund.
The June 30 Federal Fund balance of $10.7 million consists primarily of non-spendable items such as
prepaids and inventory and unavailable revenue for those revenues to be received later than the time period
used for revenue recognition. Expenditures and revenues in the federal fund remained relatively consistent
from prior years with an increase of 5% in expenditures and a 3% increase in revenues with no significant
changes in FY19 from prior year. The federal fund balance decreased by $5.5 million due to a larger
increase in federal fund expenditures than revenues.
Proprietary Funds
The State’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. The increases in the net position of the proprietary funds are discussed
under “Business-type Activities” above.
General Fund Budgetary Highlights:
The State has a biennial appropriated budget. The fiscal year ending June 30, 2019, was the second year
of the 2017-19 budget cycle. The original budget increased $205.4 million. The increases to the beginning
appropriated budget are from authorized carryover of general fund appropriation authority and legislative
changes of which the larger ones are noted below.
At the beginning of the 2017-19 budget cycle, there was an increase in the original budget of $79.9 million
due to the authorized carryover of general fund appropriation authority from the 2015-17 biennium, a $7.2
million increase for capital construction carryover, and a $11.4 million increase for Theodore Roosevelt
Presidential Library carryover.
Several state agencies were authorized by appropriation laws to carryover a portion or all of their general
fund appropriation for various purposes, including the University System, $21 million, the Department of
29
Transportation, $25 million, the Industrial Commission, $2.4 million, the Department of Human Services,
$11.7 million, Legislative Council, $4.6 million, the Department of Commerce, $2.9 million, the Adjutant
General, $2 million and Office of Management & Budget, $3.7 million.
Of the $7.2 million in capital construction carryover dollars, $1.3 million was for the Attorney General; $2.2
million was for the Secretary of State; $3.7 million was for the Parks and Recreation and various smaller
amounts for several other state agencies.
During the 2019 Legislative Session the legislature increased budgets by $19.2 million in several agencies
for different reasons. The Governor’s office received an increase in general fund budget of $15 million to
deposit into a fund to establish funding for the Theodore Roosevelt Presidential Library and Museum. Other
increases were $1 million for the Bank of North Dakota for Loan interest payments in relation to protest
costs and the Tax Department of $1.3 million for the Homestead tax and disabled veterans credit.
Also, during the Legislative Session and increase of $52.6 million was for several Universities with the
largest being for North Dakota State University of $28 million, University of North Dakota for $9 million,
Bismarck State College of $8.9 million for different capital projects at each university.
Other items appropriated during the 2019 legislative session was $13 million for the Department of
Transportation for the purpose of road maintenance and $28 million for the Department of Commerce to
defray the expenses relating to the beyond visual line of sight unmanned aircraft system program.
There were no expenditures in excess of general fund authority. The difference between the final
amended budget and actual spending was $51.9 million below final budgeted estimates.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets: At the end of the fiscal year 2019, the State had invested $6.4 billion, net of accumulated
depreciation, in a broad range of capital assets. Depreciation charges for this fiscal year totaled $226
million.
(Net of Depreciation, Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2019 2018* 2019 2018 2019 2018*
Land and Land Improvements $161,050 $159,143 $24,099 $24,099 $185,149 $183,242
Building & Building Improvements 411,708 402,500 1,139,160 1,142,194 1,550,868 1,544,694
Equipment 168,030 158,485 172,127 176,252 340,157 334,737
Intangibles
Software 244,549 148,569 1,982 3,043 246,531 151,612
Other 9,684 10,025 8,441 8,420 18,125 18,445
Infrastructure 2,588,639 2,019,522 118,542 115,892 2,707,181 2,135,414
Construction in Progress 1,653,401 2,127,056 166,949 58,112 1,820,350 2,185,168
Total $5,237,061 $5,025,300 $1,631,300 $1,528,012 $6,868,361 $6,553,312
* Beginning capital asset balances were adjusted for certain reclassifications.
The total increase in the State’s investments in capital assets for the current fiscal year was 4.8% in terms
of net book value. However, actual expenditures to purchase or construct capital assets were approximately
$1.3 billion for the year. A major portion of this amount was used to construct or reconstruct assets for
highway construction. More detailed information on the State’s capital assets can be found in Note 3H to
the financial statements.
Long-term Debt: Article X, Section 13 of the Constitution of North Dakota provides that the state may issue
or guarantee the payment of bonds provided that all bonds in excess of $2 million are: secured by first
30
mortgage upon property and no further indebtedness may be incurred by the state unless evidenced by a
bond issue; authorized by law, for a certain purpose; provisioned to pay the interest semiannually, and pay
the principal within 30 years. The law authorized the bond issue must specifically appropriate the provisions
to the payment of the principal and interest of the bond. The State has no general obligation bonds
outstanding at June 30, 2019.
The State does have a number of revenue bonds outstanding at June 30, 2019. Current state statutes
empower certain state agencies and the Building Authority, a component unit of the State, to issue bonds
as part of their activities. This debt is not backed by the full faith and credit of the State of North Dakota.
The principal and interest on revenue bonds issued by state agencies is payable from designated revenue
sources. The Building Authority’s bonds generate revenue to finance the construction and improvements
of State buildings. Revenues derived from leases on the buildings fund the debt service requirements.
The Bank of North Dakota has advances from the Federal Home Loan Bank in the amounts of $1.1 billion.
The advances have a fixed rate of interest, ranging from 1.61 percent to 5.56 percent.
More detailed information regarding the State’s long-term obligations is presented in Note 3L to the financial
statements.
State of North Dakota's Outstanding Debt
(Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2018 2018
2019 2018 2019 Restated 2019 Restated
Revenue Bonds $29,950 $40,429 $1,525,285 $1,242,368 $1,555,235 $1,282,797
Certificate of
Participation - - 96,843 - 96,843 -
Notes Payable 21,897 22,247 1,120,787 1,289,686 1,142,684 1,311,933
Total $51,847 $62,676 $2,742,915 $2,532,054 $2,794,762 $2,594,730
The State’s total debt increased approximately 7.8% during the current fiscal year.
ECONOMIC CONDITION AND OUTLOOK
Moody’s Analytics recently completed an analysis of the North Dakota economy for its Précis U.S. State
October 2019 publication. The report depicts an economy in recovery, but at a slow pace due to low
commodity prices and slow employment growth.
North Dakota’s outlook is linked tightly to two major industries, energy and agriculture. Oil production per
rig has risen by more than 25 percent per rig in the last year. Additionally, overall production is at an all-
time high averaging over 1.44 million barrels per day. This nation-leading gain has put the Bakken at the
forefront among all shale oil plays for output per rig. The higher productivity will lift output and improve
profits. The most recent average price per barrel of oil was at $50.25, which is slightly over the estimated
price of $48.50 used for budgeting purposes.
The trade war with China has had an adverse impact on commodity prices in North Dakota, but the
cancellation of a round a of tariff hikes will lead to an increase in the purchase of farm commodities and will
lift prices.
North Dakota’s job growth dropped slightly from the national level in year-to-date growth, but still grew by
a modest 0.3%. Unemployment is still low in North Dakota with the jobless rate at a historic low of 2.4%.
Although employment is declining slightly in the mining industry due to increased productivity, the
31
construction and manufacturing industries continue to increase their hiring and goods employment is at a
more than three year high.
Median household income and per capita income for North Dakota are both ahead of the national average.
For 2019, median household income in North Dakota was $66,605 compared to $63,179 for the U.S. Per
capita income for 2019 was $55,452 for North Dakota, while $54,446 for the U.S.
CONTACTING THE STATE’S OFFICE OF FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with
a general overview of the State’s finances and to demonstrate the State’s accountability for the money it
receives. Questions about this report or additional financial information should be addressed to the State
of North Dakota, Office of Management and Budget, 600 E. Boulevard, Dept. 110, Bismarck, ND 58505.
32
State of North Dakota
Basic Financial Statements
33
STATE OF NORTH DAKOTA
Statement of Net Position
June 30, 2019
Primary Government Component
Governmental Business-Type Units
Activities Activities Total (GASB Based)
ASSETS
Cash and Cash Equivalents $ 270,986,685 $ 724,241,415 $ 995,228,100 $ 15,605,709
Investments 12,539,561,402 4,028,874,532 16,568,435,934 818,362
Accounts Receivable - Net 148,202,363 124,079,450 272,281,813 232,795
Taxes Receivable - Net 609,569,080 - 609,569,080 -
Interest Receivable - Net 44,922,497 70,068,820 114,991,317 80,999
Intergovernmental Receivable - Net 222,311,091 28,079,713 250,390,804 -
Internal Receivable 2,885,291,087 - - -
Due from Component Units - 34,963,635 34,963,635 -
Due from Primary Government - - - 61,000
Prepaid Items 11,280,631 4,715,769 15,996,400 -
Inventory 24,747,168 34,356,247 59,103,415 -
Loans and Notes Receivable - Net 188,060,261 4,774,052,611 4,962,112,872 10,857,772
Pension Assets 27,458,900 - 27,458,900 -
Other Assets - 48,167,473 48,167,473 161,200
Restricted Assets:
Cash and Cash Equivalents 279,367 216,254,000 216,533,367 80,867,016
Investments - 55,778,382 55,778,382 985,939,000
Interest Receivable - Net - 4,488,000 4,488,000 5,933,000
Loans and Notes Receivable - Net - 1,198,534,000 1,198,534,000 -
Capital Assets:
Nondepreciable 1,814,451,711 191,047,765 2,005,499,476 1,115,389
Depreciable, Net 3,422,608,774 1,440,252,108 4,862,860,882 6,836
Total Assets 22,209,731,017 12,977,953,920 32,302,393,850 1,101,679,078
DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Bond Refunding 2,130,000 3,988,193 6,118,193 3,802,000
Financial Derivative Instrument - 7,886,000 7,886,000 -
Unrealized Loss on Interest Rate Swap - 2,545,000 2,545,000 -
Derived from Pensions 283,360,544 96,933,074 380,293,618 113,000
Derived from OPEB 8,226,972 2,863,884 11,090,856 -
Total Deferred Outflows of Resources 293,717,516 114,216,151 407,933,667 3,915,000
* An internal payable balance remains in the Total column because certain Business-Type Activities have different
fiscal year ends than the Governmental Activities. As internal balances are reported separately as internal receivables
and internal payables, those lines, as well as the total assets and total liabilities, do not crossfoot.
The Accompanying Notes are an Integral Part of the Financial Statements
34
STATE OF NORTH DAKOTA
Statement of Net Position
June 30, 2019
Primary Government Component
Governmental Business-Type Units
Activities Activities Total (GASB Based)
LIABILITIES
Accounts Payable 324,984,357 59,939,338 384,923,695 724,556
Accrued Payroll 58,163,221 41,607,116 99,770,337 2,587
Securities Lending Collateral 264,798,011 6,178,872 270,976,883 -
Interest Payable 1,375,537 18,968,484 20,344,021 4,802,000
Intergovernmental Payable 214,668,082 6,176,602 220,844,684 -
Tax Refunds Payable 134,827,724 - 134,827,724 -
Internal Payable - 3,114,964,554 229,673,467 -
Due to Component Units - 36,808,983 36,808,983 -
Contract Retainage Payable 23,382,205 3,445,240 26,827,445 -
Federal Funds Purchased - 271,505,000 271,505,000 -
Other Deposits - 933,175,958 933,175,958 -
Amounts Held In Custody for Others - 20,993,981 20,993,981 -
Unearned Revenue 7,309,467 136,482,443 143,791,910 49,809
Financial Derivative Instrument - 7,886,000 7,886,000 -
Other Liabilities - 29,220,333 29,220,333 136,668
Long-Term Liabilities
Due within one year 26,492,478 1,030,736,584 1,057,229,062 26,981,001
Due in more than one year 81,831,083 2,976,289,829 3,058,120,912 523,014,340
Net Pension Liability 658,978,231 228,512,880 887,491,111 279,000
Net OPEB Liability 31,260,024 10,146,883 41,406,907 -
Total Liabilities 1,828,070,420 8,933,039,080 7,875,818,413 555,989,961
DEFERRED INFLOWS OF RESOURCES
Grant Received Prior to Time Requirements - 140,783 140,783 -
Increase in Fair Value of Hedging Derivatives - 15,750 15,750 -
Unrealized Gain on Interest Rate Swap - 12,846,000 12,846,000 -
Derived from Pensions 61,146,519 21,308,001 82,454,520 21,000
Derived from OPEB 2,068,442 691,441 2,759,883 -
Total Deferred Inflows of Resources 63,214,961 35,001,975 98,216,936 21,000
NET POSITION
Net Investment in Capital Assets 5,185,682,467 1,246,740,894 6,432,423,361 6,836
Restricted for:
General Government 7,732,114 - 7,732,114 -
Education 5,353,280,164 - 5,353,280,164 -
Health and Human Services 25,165,341 - 25,165,341 -
Regulatory Purposes 73,989,399 - 73,989,399 -
Public Safety & Corrections 3,984,296 - 3,984,296 -
Agriculture and Commerce 61,938,107 - 61,938,107 -
Cultural and Natural Resources 455,693,018 - 455,693,018 -
Transportation 542,536,563 - 542,536,563 -
Capital Projects - 84,464 84,464 534,286
Debt Service 782,977 191,273,713 192,056,690 98,810,000
Loan Purposes - 42,860,355 42,860,355 420,857,000
Pledged Assets - 470,185,000 470,185,000 -
Unemployment Compensation - 224,309,763 224,309,763 -
Pension Benefits 27,458,900 - 27,458,900 -
Permanent Fund and University System - Nonexpendable 76,551,281 18,384,451 94,935,732 2,401,493
University System - Expendable - 23,875,071 23,875,071 -
Other 10,673,456 1,914,774 12,588,230 -
Unrestricted 8,786,695,069 1,904,500,531 10,691,195,600 26,973,502
Total Net Position $ 20,612,163,152 $ 4,124,129,016 $ 24,736,292,168 $ 549,583,117
The Accompanying Notes are an Integral Part of the Financial Statements
35
STATE OF NORTH DAKOTA
Statement of Activities
For the Fiscal Year Ended June 30, 2019
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary Government:
Governmental Activities:
General Government $ 1,183,233,944 $ 37,185,115 $ 2,853,268 $ -
Education 1,238,988,634 7,147,934 572,362,721 -
Health and Human Services 1,947,263,363 80,627,617 1,095,465,447 -
Regulatory 61,213,248 29,490,252 5,428,477 106,834
Public Safety and Corrections 230,666,579 32,002,961 47,981,758 -
Agriculture and Commerce 99,247,117 32,809,364 24,395,640 -
Natural Resources 261,307,506 38,390,527 41,401,335 -
Transportation 443,629,333 120,377,945 331,814,341 -
Interest on Long Term Debt 1,952,361 - - -
Total Governmental Activities 5,467,502,085 378,031,715 2,121,702,987 106,834
Business-Type Activities:
Bank of North Dakota 98,931,503 251,626,000 - -
Housing Finance 52,714,991 49,362,786 15,331,000 -
Loan Programs 12,665,669 13,095,470 187,656 -
State Lottery 26,174,686 35,511,058 12,952 -
Unemployment Compensation 84,205,911 114,657,558 4,442,751 -
University System 1,198,989,180 540,691,218 249,838,061 19,925,817
Workforce Safety & Insurance 297,497,091 249,787,742 137,014,666 -
Other 594,491,102 600,125,017 3,963,745 -
Total Business-Type Activities 2,365,670,133 1,854,856,849 410,790,831 19,925,817
Total Primary Government $ 7,833,172,218 $ 2,232,888,564 $ 2,532,493,818 $ 20,032,651
Component Units (GASB Based): $ 31,204,053 $ 6,669,587 $ 43,890,125 $ 6,000
General Revenues:
Taxes:
Individual and Corporate Income Taxes
Sales and Use Taxes
Oil, Gas and Coal Taxes
Business and Other Taxes
Unrestricted Investment Earnings
Tobacco Settlement
Miscellaneous
Contributions to Perm Fund Principal
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position, Beginning of Year, as restated
Net Position, Ending
The Accompanying Notes are an Integral Part of the Financial Statements
36
Net (Expense) Revenue and Change in Net Position
Primary Government Component
Governmental Business-Type Units
Activities Activities Total (GASB Based)
$ (1,143,195,561) $ (1,143,195,561)
(659,477,979) (659,477,979)
(771,170,299) (771,170,299)
(26,187,685) (26,187,685)
(150,681,860) (150,681,860)
(42,042,113) (42,042,113)
(181,515,644) (181,515,644)
8,562,953 8,562,953
(1,952,361) (1,952,361)
(2,967,660,549) (2,967,660,549)
152,694,497 152,694,497
11,978,795 11,978,795
617,457 617,457
9,349,324 9,349,324
34,894,398 34,894,398
(388,534,084) (388,534,084)
89,305,317 89,305,317
9,597,660 9,597,660
- (80,096,636) (80,096,636)
(2,967,660,549) (80,096,636) (3,047,757,185)
$ 19,361,659
604,088,632 - 604,088,632 -
1,435,129,762 - 1,435,129,762 -
2,586,569,876 - 2,586,569,876 -
110,714,853 - 110,714,853 -
360,264,138 - 360,264,138 -
20,752,400 - 20,752,400 -
231,745,021 5,162,713 236,907,734 -
11,014,244 - 11,014,244 -
(290,718,287) 277,018,465 (13,699,822) -
5,069,560,639 282,181,178 5,351,741,817 -
2,101,900,090 202,084,542 2,303,984,632 19,361,659
18,510,263,062 3,922,044,474 22,432,307,536 530,221,458
$ 20,612,163,152 $ 4,124,129,016 $ 24,736,292,168 $ 549,583,117
The Accompanying Notes are an Integral Part of the Financial Statements
37
STATE OF NORTH DAKOTA
Statement of Net Assets
Component Units - University System Foundation
FASB Basis
June 30, 2019
Major Nonmajor
University System University System
Foundation Foundation
ASSETS
Current Assets:
Cash and Cash Equivalents $ 47,590,336 $ 13,461,594
Receivable from Primary Institution 4,614,889 105,189
Investments 11,614,494 21,303,497
Accounts Receivable - Net 6,468,139 1,089,515
Unconditional Promises to Give - Net 16,705,679 766,858
Net investment in Direct Financing Leases 1,166,959 -
Inventory 1,102,034 -
Other Assets 1,231,103 72,854
Total Current Assets 90,493,633 36,799,507
Noncurrent Assets:
Restricted Cash and Cash Equivalents 948,080 -
Investments:
Investments, Net of Current Portion 505,986,449 35,211,972
Investments, Restricted 5,345,576 -
Investments Held In Trust 29,541,323 3,975,639
Beneficial Interest In Trust 17,089,739 -
Charitable Gift Annuity Investments 6,054,740 -
Charitable Remainder Trust Account Investments 18,589,642 -
Real Estate and Equipment Held for Investment - Net 18,862,316 -
Other Long-Term Investments 42,685,791 1,077,974
Contracts for Deed & Notes Receivable, Net of Current Portion 775,488 -
Long-Term Pledges Receivable 43,391,788 4,858,985
Other Receivables 41,643 -
Receivable from Primary Institution 32,577,967 116,666
Net investment in Direct Financing Leases, Net of Current Portion 12,548,962 -
Other noncurrent assets 2,396,351 438,191
Notes Receivable - Net 6,800,000 -
Capital Assets - Net 138,175,166 15,865,080
Total Noncurrent Assets 881,811,021 61,544,507
Total Assets 972,304,654 98,344,014
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities 3,448,816 139,651
Payable to Primary Institution 4,196,437 940,871
Accrued Payroll 1,094,051 2,692
Gift Annuities & Life Income Agreements 2,846,496 41,602
Unearned Revenue 9,996,982 205,000
Deposits Held in Custody for Others - 513,847
Other Liabilities 761,715 2,334
Current Potion of Long-Term Liabilities 4,325,873 184,009
Total Current Liabilities 26,670,370 2,030,006
Noncurrent Liabilities:
Deposits 3,493,349 -
Gift Annuities & Life Income Agreements, Net of Current Portion 18,386,578 535,620
Obligations Under Split-Interest Agreement 5,765,744 -
Investments Held on Behalf of Institutions 19,530,490 3,461,792
Other Liabilities 518,548 -
Long-Term Liabilities 53,837,701 6,478,962
Total Noncurrent Liabilities 101,532,410 10,476,374
Total Liabilities 128,202,780 12,506,380
Net Assets
With Donor Restriction 619,301,132 74,191,322
Without Donor Restriction 224,800,742 11,646,312
Total Net Asset 844,101,874 85,837,634
Total Liabilities and Net Assets $ 972,304,654 $ 98,344,014
The Accompanying Notes are an Integral Part of the Financial Statements 38
STATE OF NORTH DAKOTA
Statement of Revenues, Expenses and Changes in Fund Net Assets
Component Units - University System Foundation
FASB Basis
For the Fiscal Year Ended June 30, 2019
Major Nonmajor
University System University System
Foundation Foundation
Support and Revenue
Gifts and Contributions $ 73,141,480 $ 12,054,848
Investment Income 28,669,601 5,749,043
Grant Revenue 4,000,000 57,192
Net Realized and Unrealized Gains (Losses) on Investment Securities (16,528,866) 512,538
Program and Event Income 51,783,186 9,716,644
Other Income 5,244,530 2,197,698
Total Support and Revenue 146,309,931 30,287,963
EXPENSES
Program Services $ 36,410,374 $ 6,195,778
Supporting Services 53,428,586 11,573,023
Fund Raising Expense 6,521,620 351,382
Total Expenses 96,360,580 18,120,183
Changes in Net Assets $ 49,949,351 $ 12,167,780
Total Net Assets - Beginning of Year , as Restated $ 794,152,523 $ 73,669,854
Total Net Assets - End of Year $ 844,101,874 $ 85,837,634
The Accompanying Notes are an Integral Part of the Financial Statements
39
STATE OF NORTH DAKOTA
Balance Sheet
Governmental Funds
June 30, 2019
Special Revenue Nonmajor
Governmental
General Federal State Funds Total
ASSETS
Cash Deposits at the Bank of ND $ 663,747,439 $ - $ 1,843,623,832 $ 535,467 $ 2,507,906,738
Cash and Cash Equivalents 259,013,921 - 11,485,703 85,943 270,585,567
Restricted Cash and Cash Equivalents 279,367 - - - 279,367
Investments at the Bank of ND - 3,000,000 348,859,722 663,000 352,522,722
Investments 6,432,592,580 - 6,072,577,514 25,054,157 12,530,224,251
Accounts Receivable - Net 19,482,766 28,127,793 100,206,225 50 147,816,834
Taxes Receivable - Net 465,267,091 - 144,188,613 113,376 609,569,080
Interest Receivable - Net 28,251,970 487 16,445,853 166,742 44,865,052
Intergovernmental Receivable - Net 15,333 206,780,575 15,141,337 - 221,937,245
Due from Other Funds 134,754,527 33,178,374 17,281,524 15 185,214,440
Prepaid Items 3,670,676 1,367,359 2,150,155 - 7,188,190
Inventory 2,955,107 10,964,480 10,704,928 - 24,624,515
Loans and Notes Receivable - Net 12,657 159,491 134,911,755 52,976,356 188,060,259
Total Assets 8,010,043,434 283,578,559 8,717,577,161 79,595,106 17,090,794,260
DEFERRED OUTFLOWS OF RESOURCES
Total Deferred Outflows of Resources - - - - -
Total Assets and Deferred Outflows of
Resources $ 8,010,043,434 $ 283,578,559 $ 8,717,577,161 $ 79,595,106 $ 17,090,794,260
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable 89,555,411 132,401,790 101,661,904 12,754 323,631,859
Accrued Payroll 35,232,695 6,743,753 13,361,044 - 55,337,492
Securities Lending Collateral 20,149,968 - 242,997,902 1,613,262 264,761,132
Interest Payable 119,075 37,193 892,052 - 1,048,320
Intergovernmental Payable 3,810,005 24,794,365 186,063,712 - 214,668,082
Tax Refunds Payable 127,228,508 - 7,599,216 - 134,827,724
Due to Other Funds 29,933,029 87,899,061 73,748,038 153,563 191,733,691
Contract Retainage Payable 427,215 10,574,975 12,380,015 - 23,382,205
Unearned Revenues - 7,115,543 143,014 - 7,258,557
Total Liabilities 306,455,906 269,566,680 638,846,897 1,779,579 1,216,649,062
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 117,092,106 3,322,254 15,188,839 - 135,603,199
Unpaid Penalty and Interest - - 821,125 - 821,125
Total Deferred Inflows of Resources 117,092,106 3,322,254 16,009,964 - 136,424,324
Fund Balances:
Nonspendable
Inventory 2,955,107 10,964,480 10,704,928 - 24,624,515
Long - Term Receivables 12,657 - - - 12,657
Prepaid Expenditures 3,670,676 1,367,359 2,150,155 - 7,188,190
Permanent Trust Fund - - - 76,551,281 76,551,281
Restricted 279,367 - 6,487,770,608 783,831 6,488,833,806
Committed 348,222,819 - 1,187,484,830 480,415 1,536,188,064
Assigned - - 374,609,779 - 374,609,779
Unassigned 7,231,354,796 (1,642,214) - - 7,229,712,582
Total Fund Balances 7,586,495,422 10,689,625 8,062,720,300 77,815,527 15,737,720,874
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance $ 8,010,043,434 $ 283,578,559 $ 8,717,577,161 $ 79,595,106 $ 17,090,794,260
40
The Accompanying Notes are an Integral Part of the Financial Statements
STATE OF NORTH DAKOTA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2019
Total Fund Balances-Governmental Funds $ 15,737,720,874
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore
are not reported as assets in governmental funds. The cost of assets is $8,727,933,679
and the accumulated depreciation is $3,585,109,020. 5,142,824,659
Other assets not available in the current period and therefore are not reported in the
governmental funds:
Net Pension Asset 27,458,900
Deferred outflows of resources are not reported in the governmental funds:
Loss on bond refunding 2,130,000
Related to OPEB 7,783,323
Related to pensions 268,166,879
Total Deferred Outflows 278,080,202
Some of the state's revenues will be collected after year-end, but are not available soon
enough to pay for the current period's expenditures, and therefore are unavailable in the funds. 135,552,289
Internal service funds are used to charge the costs of certain activities to individual funds.
The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of
the internal service funds are included in governmental activities in the statement of net position. 99,423,127
Voluntary termination benefits for employees are accrued in the statement of net position. (252,229)
Deferred inflows of resources are not reported in the governmental funds:
Unpaid penalty and interest 821,125
Related to OPEB (1,948,438)
Related to pensions (58,110,438) (59,237,751)
Long-term liabilities and related accrued interest are not due and payable in the current period
and therefore are not reported as liabilities in the funds. Those liabilities consist of:
Bonds Payable (29,950,302)
Notes Payable (21,897,374)
Accrued Interest on Long-Term Liabilities (327,217)
Compensated Absences (43,820,507)
Capital Leases (1,100,140)
Other Postemployment Benefit Obligation, net (29,612,684)
Net Pension Liability (621,722,680)
Claims and Judgments (976,015)
Total Long-Term Liabilities (749,406,919)
Net Position of Governmental Activities $ 20,612,163,152
The Accompanying Notes are an Integral Part of the Financial Statements
41
STATE OF NORTH DAKOTA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2019
Special Revenue Nonmajor
Governmental
General Federal State Funds Total
REVENUES
Individual and Corporate Income Taxes $ 591,881,213 $ - $ 3,021,058 $ - $ 594,902,271
Sales and Use Taxes 1,138,028,146 - 309,011,020 - 1,447,039,166
Oil, Gas, and Coal Taxes 776,111,047 - 1,808,773,920 1,576,908 2,586,461,875
Business and Other Taxes 63,568,228 - 49,923,683 - 113,491,911
Licenses, Permits and Fees 19,042,705 11,941 189,564,629 9,820 208,629,095
Intergovernmental 2,119,118 1,692,379,718 23,572,053 4,300,620 1,722,371,509
Sales and Services 9,890,045 11,169,825 66,877,236 8,460 87,945,566
Royalties and Rents 26,858,926 5,222 401,654,333 - 428,518,481
Fines and Forfeits 5,835,226 - 25,808,726 - 31,643,952
Interest and Investment Income 335,563,131 9,039 231,271,103 1,658,885 568,502,158
Tobacco Settlement 5,235 - 20,747,165 - 20,752,400
Commodity Assessments - - 24,055,725 - 24,055,725
Miscellaneous 2,386,263 3,369,272 20,468,301 38,046 26,261,882
Total Revenues 2,971,289,283 1,706,945,017 3,174,748,952 7,592,739 7,860,575,991
EXPENDITURES
Current:
General Government 164,583,432 1,834,519 46,374,817 86,009 212,878,777
Education 737,454,807 166,317,662 332,662,026 - 1,236,434,495
Health and Human Services 735,377,421 1,041,196,492 124,639,746 104,278 1,901,317,937
Regulatory 19,563,616 4,626,480 19,827,210 - 44,017,306
Public Safety and Corrections 152,233,412 39,960,685 13,879,523 - 206,073,620
Agriculture and Commerce 21,791,393 22,267,187 53,232,173 - 97,290,753
Natural Resources 16,027,296 26,633,333 197,473,679 - 240,134,308
Transportation 528,583 222,738,307 135,990,048 - 359,256,938
Intergovernmental - Revenue Sharing 4,224,146 - 960,259,692 - 964,483,838
Capital Outlay 28,352,926 149,456,474 163,548,079 - 341,357,479
Debt Service:
Principal 458,386 336,069 24,569 10,020,000 10,839,024
Interest and Other Charges 491,070 7,901 6,918 1,567,650 2,073,539
Total Expenditures 1,881,086,488 1,675,375,109 2,047,918,480 11,777,937 5,616,158,014
Revenues over (under) Expenditures 1,090,202,795 31,569,908 1,126,830,472 (4,185,198) 2,244,417,977
OTHER FINANCING SOURCES (USES)
Capital Lease Acquisitions 22,628 157,986 3,644 - 184,258
Sale of Capital Assets 90,878 175,801 874,360 - 1,141,039
Transfers In 217,633,703 1,416,938 59,380,642 7,305,907 285,737,190
Transfers Out (390,563,836) (38,821,800) (145,013,334) (2,056,507) (576,455,477)
Total Other Financing Sources (Uses) (172,816,627) (37,071,075) (84,754,688) 5,249,400 (289,392,990)
Net Change in Fund Balances 917,386,168 (5,501,167) 1,042,075,784 1,064,202 1,955,024,987
Fund Balances - Beginning of Year, as restated 6,669,109,254 16,190,792 7,020,644,516 76,751,325 13,782,695,887
Fund Balances - End of Year $ 7,586,495,422 $ 10,689,625 $ 8,062,720,300 $ 77,815,527 $ 15,737,720,874
The Accompanying Notes are an Integral Part of the Financial Statements
42
STATE OF NORTH DAKOTA
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2019
Net Change in Fund Balances-Total Governmental Funds $ 1,955,024,987
Amounts reported for governmental activities in the statement of activities
are different because:
Capital outlays are reported as expenditures in governmental funds. However, in the
statement of activities, the cost of those assets is allocated over their estimated
useful lives as depreciation expense. In the current period, these amounts are:
Capital outlay 341,419,925
Depreciation expense (130,992,989)
Excess of capital outlay over depreciation expense 210,426,936
In the statement of activities, only the gain(loss) on the sale of assets is reported,
whereas in the governmental funds, the proceeds from the sale increase financial
resources. Thus, the change in net position differs from the change in fund balance by
the book value of the assets sold. (410,695)
Donations of capital assets increase net position in the statement of activities
but do not appear in the governmental funds because they are not financial resources. 20,000
Some of the assets acquired this year were financed through capital leases.
The amount financed is reported in the governmental funds as a source of
financing. However, capital leases are reported as long-term liabilities in the
statement of net position. (184,258)
Based on receipt dates, some revenues are not considered "available" revenues and are
unavailable in the governmental funds. Unavailable revenues increased/decreased by
this amount this year. (4,274,800)
Internal service funds are used by management to charge the costs of certain
activities to individual funds. The net revenue of internal service funds is reported
with governmental activities 1,720,272
Bonds proceeds provide current financial resources to governmental funds, but issuing
debt increases long-term liabilities in the statement of net position. -
Note proceeds provide current financial resources to governmental funds, but issuing
debt increases long-term liabilities in the statement of net position. -
Voluntary termination benefits do not require current financial resources and therefore are
not reported as expenditures in the governmental funds. (57,423)
The pension assets resulting from contributions in excess of annual required contribution
are not financial resources and, therefore, are not reported in the funds. (6,177,042)
Deferred outflows of resources do not provide current financial resources
Amortization of deferred loss on bond refunding (489,000)
Related to OPEB 367,864
Related to pension (34,253,261)
Total deferred outflows (34,374,397)
Deferred pension inflows are not considered current cash expenses and are not
reported as an expenditure in the funds
Unpaid penalty and interest 172,661
Related to OPEB (117,623)
Related to pension (18,538,387)
Total deferred outflows (18,483,349)
The net OPEB liability relating to retirement plans 770,605
The net pension liability relating to retirement plans (14,112,165)
Repayment of long-term debt is reported as an expenditure in governmental funds
but the repayment reduces long-term liabilities in the statement of net position.
In the current year, these amounts consist of:
Bond principal retirement 10,478,700
Note payments 349,665
Capital lease payments 469,356
Total long-term debt repayment 11,297,721
Some items reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures in the
governmental funds. This adjustment combines the net changes of the following:
Accrued Interest 86,183
Compensated Absences 187,416
Claims and Judgments 440,099
Total additional expenditures 713,698
Change in Net Position of Governmental Activities $ 2,101,900,090
The Accompanying Notes are an Integral Part of the Financial Statements
43
STATE OF NORTH DAKOTA
Statement of Net Position
Proprietary Funds
June 30, 2019 Governmental
Business-Type Activities - Enterprise Funds Activities
Bank of Workforce Other
North Housing University Safety and Enterprise Internal
Dakota Finance System Insurance Funds Total Service Funds
ASSETS
Current Assets:
Cash Deposits at the Bank of ND $ 7,430,000 $ 202,193,296 $ 2,871,189 $ 149,752,740 $ 362,247,225 $ 32,772,230
Cash and Cash Equivalents - 10,177,641 - 204,371,774 214,549,415 401,118
Investments at the Bank of ND - 140,589,569 - 1,000,000 141,589,569 341,583
Investments - 116,091 2,060,882,106 50,590,202 2,111,588,399 9,337,152
Accounts Receivable - Net 807,000 23,091,748 26,566,996 73,613,706 124,079,450 385,529
Interest Receivable - Net 108,000 - 10,666,901 3,219,919 13,994,820 54,952
Intergovernmental Receivable - Net 530,000 26,643,518 - 906,195 28,079,713 373,846
Due from Other Funds 6,000 18,650,505 - 1,090,547 19,747,052 8,944,643
Due from Component Units - 10,813,618 - - 10,813,618 -
Prepaid Items 63,000 - 395,608 4,257,161 4,715,769 4,092,441
Inventory - 6,986,515 - 27,369,732 34,356,247 122,653
Loans and Notes Receivable - Net - 6,180,651 - 22,685,253 28,865,904 -
Other Assets 764,000 5,549,973 - 18,685 6,332,658 -
Restricted Cash at the Bank of ND 15,076,000 - - 4,848,918 19,924,918 -
Restricted Cash and Cash Equivalents 216,029,000 - - 225,000 216,254,000 -
Restricted Investments at the Bank of ND - - - 1,000,000 1,000,000 -
Restricted Investments 7,335,000 - - - 7,335,000 -
Restricted Interest Receivable - Net 4,488,000 - - - 4,488,000 -
Restricted Loans Receivable - Net 27,954,000 - - 162,000 28,116,000 -
Total Current Assets 280,590,000 450,993,125 2,101,382,800 545,111,832 3,378,077,757 56,826,147
Noncurrent Assets:
Restricted Cash at the Bank of ND - 40,343,773 - - 40,343,773 -
Restricted Investments at the Bank of ND - 7,831,721 - - 7,831,721 -
Restricted Investments 42,133,000 6,310,382 - - 48,443,382 -
Investments at the Bank of ND - 100,681,000 - - 100,681,000 -
Investments - 10,941,133 - - 10,941,133 -
Due from Component Units - 24,150,017 - - 24,150,017 -
Loans and Notes Receivable - Net - 21,073,874 - 352,338,833 373,412,707 -
Restricted Loans Receivable - Net 1,170,418,000 - - - 1,170,418,000 -
Other Noncurrent Assets 5,321,000 390,197 - 5,818,618 11,529,815 -
Capital Assets:
Nondepreciable - 159,702,786 4,152,336 24,743,643 188,598,765 154,838
Depreciable, Net 13,000 1,306,247,796 13,634,392 112,556,920 1,432,452,108 94,080,986
Total Noncurrent Assets 1,217,885,000 1,677,672,679 17,786,728 495,458,014 3,408,802,421 94,235,824
Bank Related Assets:
Cash and Cash Equivalents $ 509,692,000 $ 509,692,000
Investments 1,906,345,000 1,906,345,000
Interest Receivable - Net 56,074,000 56,074,000
Due from Other Funds 117,359,000 117,359,000
Loans and Notes Receivable - Net 4,371,774,000 4,371,774,000
Other Assets 30,305,000 30,305,000
Capital Assets:
Nondepreciable 2,449,000 2,449,000
Depreciable, Net 7,800,000 7,800,000
Total Bank Related Assets 7,001,798,000 7,001,798,000
Total Assets 7,001,798,000 1,498,475,000 2,128,665,804 2,119,169,528 1,040,569,846 13,788,678,178 151,061,971
DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Bond Refunding - - 3,988,193 - - 3,988,193 -
Financial Derivative Instrument - 7,886,000 - - - 7,886,000 -
Unrealized Loss on Interest Rate Swap 2,545,000 - - - - 2,545,000 -
Derived from Pensions 6,889,000 1,677,000 66,901,629 12,296,330 9,169,115 96,933,074 15,193,665
Derived from OPEB 158,000 51,000 2,005,931 313,963 334,990 2,863,884 443,649
Total Deferred Outflows of Resources 9,592,000 9,614,000 72,895,753 12,610,293 9,504,105 114,216,151 15,637,314
The Accompanying Notes are an Integral Part of the Financial Statements
44
STATE OF NORTH DAKOTA
Statement of Net Position
Proprietary Funds
June 30, 2019 Governmental
Business-Type Activities - Enterprise Funds Activities
Bank of Workforce Other
North Housing University Safety and Enterprise Internal
Dakota Finance System Insurance Funds Total Service Funds
LIABILITIES
Current Liabilities:
Accounts Payable 1,490,000 29,162,197 5,282,939 24,004,202 59,939,338 1,403,149
Accrued Payroll - 40,692,136 - 914,980 41,607,116 2,573,500
Securities Lending Collateral - - 6,100,164 78,708 6,178,872 36,879
Interest Payable 16,337,000 2,314,599 - 12,358 18,663,957 2,576
Intergovernmental Payable 94,000 469,475 - 6,295,197 6,858,672 -
Due to Other Funds 17,000 4,224,063 208,849 86,817,361 91,267,273 394,458
Due to Component Units - 4,043,735 - - 4,043,735 -
Contract Retainage Payable - 3,445,240 - - 3,445,240 -
Other Deposits - 6,837,543 - - 6,837,543 -
Amounts Held in Custody for Others 14,941,000 - - 6,052,981 20,993,981 -
Claims/Judgments Payable - - 130,913,280 822,043 131,735,323 1,213,316
Dividends Payable - - 113,235,072 - 113,235,072 -
Compensated Absences Payable 237,000 2,710,196 1,399,626 176,807 4,523,629 215,050
Notes Payable - 1,224,581 - - 1,224,581 -
Capital Leases Payable - 3,283,858 - - 3,283,858 10,078
Bonds Payable 39,830,000 10,617,051 - 120,000 50,567,051 -
Unearned Revenue 343,000 20,584,992 115,278,892 275,559 136,482,443 -
Other Current Liabilities - - - 112,936 112,936 -
Total Current Liabilities 73,289,000 129,609,666 372,418,822 125,683,132 701,000,620 5,849,006
Noncurrent Liabilities:
Intergovernmental Payable 9,000 4,588,300 - - 4,597,300 -
Due to Component Units - 32,704,248 - - 32,704,248 -
Claims/Judgments Payable - - 960,030,720 - 960,030,720 6,912,322
Compensated Absences Payable 107,000 28,176,277 227,846 1,261,378 29,772,501 2,220,248
Notes Payable - 16,026,980 - - 16,026,980 -
Capital Leases Payable - 33,683,962 - - 33,683,962 8,209
Bonds Payable 1,222,566,000 327,922,572 - 2,576,794 1,553,065,366 -
Financial Derivative Instrument 7,886,000 - - - 7,886,000 -
Net Pension Liability 4,000,000 162,113,629 25,710,589 19,536,662 211,360,880 37,255,551
Net OPEB Liability 190,000 7,146,892 1,158,959 841,032 9,336,883 1,647,340
Other Noncurrent Liabilities 4,463,000 244,632 - 18,273,765 22,981,397 -
Total Noncurrent Liabilities 1,239,221,000 612,607,492 987,128,114 42,489,631 2,881,446,237 48,043,670
Bank Related Liabilities:
Interest Payable 291,008 291,008
Due to Other Funds 1,235,992 1,235,992
Due to Component Units 61,000 61,000
Federal Funds Purchased 271,505,000 271,505,000
Deposits Held for Other Funds 3,924,082,422 3,924,082,422
Other Deposits 845,736,578 845,736,578
Other Liabilities 6,126,000 6,126,000
Long Term Liabilities:
Due within one year 725,485,000 725,485,000
Due in more than one year 379,113,000 379,113,000
Net Pension Liability 17,152,000 17,152,000
Net OPEB Liability 810,000 810,000
Total Bank Related Liabilities 6,171,598,000 6,171,598,000
Total Liabilities 6,171,598,000 1,312,510,000 742,217,158 1,359,546,936 168,172,763 9,754,044,857 53,892,676
DEFERRED INFLOWS OF RESOURCES
Grants Received Prior to Time Requirements - - 140,783 - - 140,783 -
Increase in Fair Value of Hedging Derivatives - - - - 15,750 15,750 -
Unrealized Gain on Interest Rate Swap 12,846,000 - - - - 12,846,000 -
Derived from Pensions 1,115,000 324,000 16,550,754 1,622,059 1,696,188 21,308,001 3,036,081
Derived from OPEB 61,000 11,000 499,230 79,889 40,322 691,441 120,004
Total Deferred Inflows of Resources 14,022,000 335,000 17,190,767 1,701,948 1,752,260 35,001,975 3,156,085
NET POSITION
Net Investment in Capital Assets 10,249,000 13,000 1,083,192,671 17,786,728 135,499,495 1,246,740,894 94,217,537
Restricted for:
Capital Projects - - 84,464 - - 84,464 -
Debt Service - 183,913,000 6,981,713 - 379,000 191,273,713 -
Loan Purposes - - 42,860,355 - - 42,860,355 -
Pledged Assets 470,185,000 - - - - 470,185,000 -
Unemployment Compensation - - - - 224,309,763 224,309,763 -
University System-Nonexpendable - - 18,384,451 - - 18,384,451 -
University System-Expendable - - 23,875,071 - - 23,875,071 -
Other - - 484,714 - 1,430,060 1,914,774 -
Unrestricted 345,336,000 11,318,000 266,290,193 752,744,209 518,530,610 1,894,219,012 15,432,987
Total Net Position $ 825,770,000 $ 195,244,000 $ 1,442,153,632 $ 770,530,937 $ 880,148,928 $ 4,113,847,497 $ 109,650,524
Reconciliation of the Proprietary Funds Statement of Net Position
to the Statement of Net Position
June 30, 2019
Total Net Position - Enterprise Funds 4,113,847,497
Amounts reported for business-type activities in the statement of net position are different because:
Prior year net position restatement and reduction of current year expenses
based on the allocation of internal service fund's net income 10,281,519
Net Position of Business-Type Activities 4,124,129,016
The Accompanying Notes are an Integral Part of the Financial Statements
45
STATE OF NORTH DAKOTA
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2019
Governmental
Business-Type Activities - Enterprise Funds Activities
Bank Workforce Other
of Housing University Safety and Enterprise Internal
North Dakota Finance System Insurance Funds Total Service Funds
OPERATING REVENUES
Sales and Services $ 7,170,000 $ 3,174,786 $ 98,958,588 $ 246,897,583 $ 757,057,340 $ 1,113,258,297 $ 101,117,013
Auxiliary Sales Pledges for Bonds - - 100,912,581 - - 100,912,581 -
Tuition and Fees - - 333,909,568 - - 333,909,568 -
Grants and Contributions - - 154,845,048 - - 154,845,048 -
Royalties and Rents - - - 1,530,450 174,763 1,705,213 -
Fines and Forfeits - - - 1,359,709 - 1,359,709 -
Interest and Investment Income 244,456,000 46,188,000 - - 5,991,350 296,635,350 -
Miscellaneous - - 1,509,536 - 98,523 1,608,059 288,989
Total Operating Revenues 251,626,000 49,362,786 690,135,321 249,787,742 763,321,976 2,004,233,825 101,406,002
OPERATING EXPENSES
Cost of Sales and Services - - 20,927,199 - 204,331,145 225,258,344 829,488
Salaries and Benefits 18,934,000 4,229,000 760,667,749 28,163,423 25,669,490 837,663,662 37,320,095
Operating 29,223,000 6,450,000 283,819,293 891,342 390,926,167 711,309,802 48,599,368
Claims - - - 147,666,582 86,283,810 233,950,392 2,463,449
Scholarships and Fellowships - - 41,698,185 - - 41,698,185 -
Interest 49,902,000 27,159,000 - - 31,000 77,092,000 -
Depreciation 813,000 5,000 72,583,004 1,459,046 7,862,962 82,723,012 11,955,444
Miscellaneous - - - - 40,866 40,866 49,379
Total Operating Expenses 98,872,000 37,843,000 1,179,695,430 178,180,393 715,145,440 2,209,736,263 101,217,223
Operating Income (Loss) 152,754,000 11,519,786 (489,560,109) 71,607,349 48,176,536 (205,502,438) 188,779
NONOPERATING REVENUES (EXPENSES)
Grants and Contracts - 14,870,000 43,708,272 - 801,525 59,379,797 -
Gifts - - 40,263,025 - - 40,263,025 -
Interest and Investment Income - 461,000 11,021,716 137,014,666 7,798,409 156,295,791 751,930
Interest Expense - - (11,404,436) (4,047,780) (2,053,048) (17,505,264) (18,388)
Dividends Expense - - - (115,189,458) - (115,189,458) -
Gain (Loss) on Sale of Capital Assets - - 4,370,608 - - 4,370,608 880,859
Tax Revenue - - 5,400,945 - - 5,400,945 -
Grant Expense - (14,868,000) (6,805,972) - - (21,673,972) -
Other - - (671,572) - (272,729) (944,301) -
Total Nonoperating Revenues
(Expenses) - 463,000 85,882,586 17,777,428 6,274,157 110,397,171 1,614,401
Income (Loss) Before Contributions and
Transfers 152,754,000 11,982,786 (403,677,523) 89,384,777 54,450,693 (95,105,267) 1,803,180
Capital Grants and Contributions - - 19,925,817 - - 19,925,817 110,106
Transfers In - 168,214 396,130,013 - 27,303,832 423,602,059 -
Transfer Out (125,153,000) (38,000) (3,909,266) - (17,483,328) (146,583,594) -
Changes in Net Position 27,601,000 12,113,000 8,469,041 89,384,777 64,271,197 201,839,015 1,913,286
Total Net Position - Beginning of Year, as restated 798,169,000 183,131,000 1,433,684,591 681,146,160 815,877,731 3,912,008,482 107,737,238
Total Net Position - End of Year $ 825,770,000 $ 195,244,000 $ 1,442,153,632 $ 770,530,937 $ 880,148,928 $ 4,113,847,497 $ 109,650,524
Reconciliation of Statement of Revenues, Expenses and Changes in
Fund Net Position of Proprietary Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2019
Net Change in Net Position-Total Enterprise Funds $ 201,839,015
Amounts reported for business-type activities in the statement of net position are different because:
Expenses were reduced based on the allocation of internal service fund's net income 245,527
Change in Net Position of Business-Type Activities $ 202,084,542
The Accompanying Notes are an Integral Part of the Financial Statements
46
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47
STATE OF NORTH DAKOTA
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2019
Business-Type Activities - Enterprise Funds
Bank
of
North Housing University
Dakota Finance System
Cash Flows from Operating Activities:
Receipts from Customers and Users $ 10,324,000 $ 188,503,786 $ 197,871,200
Receipts from Tuition and Fees - - 331,698,479
Interest Income on Loans - - -
Receipts from Loan Principal Repayments - - 6,022,354
Receipts from Federal and Local Agencies - 396,000 -
Receipts from Other Funds - - -
Receipts from Grants and Contracts - - 166,922,014
Receipts from Others - - 1,580,958
Payments to Other Funds - (155,000) -
Payments for Loan Funds - - (1,059,790)
Payments for Scholarships and Fellowships - - (41,217,457)
Payments to Suppliers (19,724,000) (381,944,000) (293,692,496)
Payments to Employees (15,472,000) (3,565,000) (740,553,794)
Claim Payments - - -
Payments to Others - (609,000) -
Other - - -
Net Cash Provided by (Used for) Operating Activities (24,872,000) (197,373,214) (372,428,532)
Cash Flows from Noncapital Financing Activities:
Proceeds from Bonds - 389,022,000 -
Proceeds from Sale of Notes and Other Borrowings 6,377,000,000 - -
Principal Payments - Bonds - (89,660,000) -
Principal Payments - Notes and Other Borrowings (6,537,133,000) - -
Interest Payments - Bonds - (23,474,000) -
Interest Payments - Notes and Other Borrowings (25,128,000) - -
Tax Collections - - 5,400,947
Transfers In - 18,214 19,692,377
Transfers Out (125,153,000) 112,000 (3,813,267)
Net Decrease in Non-Interest Bearing Deposits 12,332,000 - -
Net Increase in Interest Bearing Deposits 152,529,000 - -
Payments of Interest on Deposits (16,948,000) - -
Interest Paid on Federal Funds and Reverse Repurchase Agreements (4,692,000) - -
Net Increase in Federal Funds and Reverse Repurchase Agreements (28,270,000) - -
Collection of Advances Made 3,394,000 - -
Loan Proceeds from Due To Other Funds - 37,353,000 191,365,125
Principal Payments on Due To Other Funds - (37,353,000) (191,391,524)
Grants and Gifts Received for Other than Capital Purposes - 14,870,000 77,897,871
State Appropriations - - 366,565,139
Agency Fund Cash Decrease - - (1,062,184)
Grants Given for Other than Capital Purposes - (14,868,000) (6,805,973)
Net Cash Provided by (Used for) Noncapital Financing Activities (192,069,000) 276,020,214 457,848,511
Cash Flows from Capital and Related Financing Activities:
Acquisition and Construction of Capital Assets (143,000) (7,000) (145,055,540)
Proceeds from Sale of Capital Assets - - 5,886,832
Proceeds from Sale of Notes and Other Borrowings - - 96,844,950
Principal Payments - Bonds - - -
Principal Payments - Notes and Other Borrowings - - (20,538,565)
Interest Payments - Bonds - - -
Interest Payments - Notes and Other Borrowings - - (11,627,313)
Capital Appropriations - - 16,233,975
Payment of Bond Issue Costs - - -
Payment on Capital Leases - - -
Interest Payments - Capital Leases - - -
Capital Grants and Gifts Received - - 13,639,009
Insurance Proceeds - - 844,171
Net Cash Provided by (Used for) Capital and Related Financing Activities (143,000) (7,000) (43,772,481)
Cash Flows from Investing Activities:
Proceeds from Sale and Maturities of Investment Securities 860,602,000 4,055,000 138,521,062
Purchase of Investment Securities (1,113,034,000) (33,108,000) (144,690,121)
Net Increase In Investments - - -
Interest and Dividends on Investments 42,910,000 353,000 9,550,520
Proceeds from Sale of Other Real Estate 3,859,000 - -
Net Decrease in Loans 36,204,000 - -
Disbursements for Loans and Loan Purchases - - -
Receipt of Loan Principal Repayments - - -
Proceeds from Collection of Loans and Notes Receivable 283,647,000 - -
Loan Income Received 197,991,000 - -
Net Cash Provided by (Used for) Investing Activities 312,179,000 (28,700,000) 3,381,461
The Accompanying Notes are an Integral Part of the Financial Statements
48
(Continued on Next Page)
Governmental
Business-Type Activities - Enterprise Funds Activities
Workforce Other
Safety and Enterprise Internal
Insurance Funds Total Service Funds
$ 139,384,437 $ 837,406,413 $ 1,373,489,836 $ 4,886,600
- - 331,698,479 -
- 59,178 59,178 -
- 1,859,981 7,882,335 -
- - 396,000 -
- - - 96,391,628
- - 166,922,014 -
64,398,472 505,500 66,484,930 -
(4,376,386) (405,663) (4,937,049) (3,178,609)
- (10,368,931) (11,428,721) -
- - (41,217,457) -
- (657,244,488) (1,352,604,984) (51,349,397)
(23,598,115) (28,644,472) (811,833,381) (31,990,767)
(159,829,638) (76,989,129) (236,818,767) (301,814)
(4,365,989) (745,532) (5,720,521) -
- 5,468,931 5,468,931 -
11,612,781 70,901,788 (512,159,177) 14,457,641
- - 389,022,000 -
- 43,000,000 6,420,000,000 -
- - (89,660,000) -
- (32,655,860) (6,569,788,860) -
- (30,000) (23,504,000) -
- (1,742,224) (26,870,224) -
- - 5,400,947 -
- 27,007,832 46,718,423 -
- (27,804,453) (156,658,720) -
- - 12,332,000 -
- - 152,529,000 -
- - (16,948,000) -
- - (4,692,000) -
- - (28,270,000) -
- - 3,394,000 -
- - 228,718,125 -
- (2,908,021) (231,652,545) -
- 801,525 93,569,396 -
- - 366,565,139 -
- - (1,062,184) -
- - (21,673,973) -
- 5,668,799 547,468,524 -
(3,458,899) (23,476,053) (172,140,492) (16,888,212)
- - 5,886,832 4,198,005
- - 96,844,950 -
- (120,000) (120,000) -
- - (20,538,565) -
- (57,200) (57,200) -
- - (11,627,313) -
- - 16,233,975 -
- (16,500) (16,500) -
- - - (11,328)
- - - (2,901)
- - 13,639,009 -
- - 844,171 -
(3,458,899) (23,669,753) (71,051,133) (12,704,436)
44,500,000 32,546,588 1,080,224,650 620,742
(53,509,687) (23,404,936) (1,367,746,744) -
- 1,519,418 1,519,418 -
- 6,248,391 59,061,911 324,679
- - 3,859,000 -
- - 36,204,000 -
- (91,716,500) (91,716,500) -
- 11,732,000 11,732,000 -
- 7,903,277 291,550,277 -
- 5,202,180 203,193,180 -
(9,009,687) (49,969,582) 227,881,192 945,421
The Accompanying Notes are an Integral Part of the Financial Statements
49
STATE OF NORTH DAKOTA
Statement of Cash Flows
Proprietary Funds (Continued)
For the Fiscal Year Ended June 30, 2019
Business-Type Activities - Enterprise Funds
Bank
of
North Housing University
Dakota Finance System
Net Change In Cash:
Net Increase (Decrease) in Cash and Cash Equivalents 95,095,000 49,940,000 45,028,959
Cash and Cash Equivalents at June 30, 2018 414,597,000 188,595,000 207,685,751
Cash and Cash Equivalents at June 30, 2019 $ 509,692,000 $ 238,535,000 $ 252,714,710
Reconciliation:
Current:
Cash Deposits at the Bank of North Dakota - 7,430,000 202,193,296
Cash and Cash Equivalents 509,692,000 - 10,177,641
Restricted Cash Deposits at the Bank of North Dakota - 15,076,000
Restricted Cash and Cash Equivalents - 216,029,000 -
Noncurrent:
Restricted Cash Deposits At The Bank of North Dakota - - 40,343,773
Cash and Cash Equivalents $ 509,692,000 $ 238,535,000 $ 252,714,710
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating Income (Loss) 152,754,000 11,519,786 (489,560,109)
Adjustments to Reconcile Operating
Income to Net Cash Provided by Operating Activities:
Depreciation 813,000 5,000 72,583,008
Amortization/Accretion - (4,125,000) -
Reclassification of Interest Revenue\Expense (198,015,000) 27,106,000 -
(Gain) Loss on Sale of Student Loans (1,620,000) - -
(Gain) Loss on Sale of Real Estate (705,000) -
Net Increase in Fair Value of Investments 4,942,000 (384,000) -
Interest Received on Program Loans - - -
Dividend Credit Applied to Receivable - - -
Receipt of Loan Principal Repayments - - -
Provision for Losses 12,000,000 - -
Other - - 2,596,270
Deferred Outflows - 240,000 8,176,521
Deferred Inflows - 123,000 3,986,671
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable - (220,990,000) (113,314)
(Increase) Decrease in Interest Receivable - (815,000) -
(Increase) Decrease in Due From 3,308,000 3,000 -
(Increase) Decrease in Intergovernmental Receivable - (378,000) -
(Increase) Decrease in Notes Receivable - - 17,317,086
(Increase) Decrease in Prepaid Items - (34,000) -
(Increase) Decrease in Inventories - - (87,885)
(Increase) Decrease in Other Assets (1,494,000) (2,251,000) (2,967,941)
Increase (Decrease) in Accounts Payable - - 7,202,014
Increase (Decrease) in Interest Payable - - -
Increase (Decrease) in Claims\Judgments Payable - - -
Increase (Decrease) in Intergovernmental Payable - (1,000) -
Increase (Decrease) in Accrued Payroll - - 3,488,050
Increase (Decrease) in Compensated Absences Payable - (6,000) (445,692)
Increase (Decrease) in Amounts Held for Others - 2,804,000 -
Increase (Decrease) in Other Deposits - - 443,083
Increase (Decrease) in Due To (4,000) 3,000 -
Increase (Decrease) in Unavailable Revenue - - 124,190
Increase (Decrease) in Net Pension Liability - 94,000 5,047,817
Increase (Decrease) in Net OPEB Liability (218,301)
Increase (Decrease) in Other Liabilities 3,149,000 (10,287,000) -
Increase (Decrease) in Dividends Payable - - -
Total Adjustments (177,626,000) (208,893,000) 117,131,577
Net Cash Provided by (Used for) Operating Activities $ (24,872,000) $ (197,373,214) $ (372,428,532)
Noncash Transactions:
Net Change in Fair Value of Investments (4,942,000) 439,000 702,180
Transfers from Net Position to Transfers Payable 128,614,000 - -
Change in Securities Lending Collateral - - -
Investment Income - - -
Dividends Credited to Premium Billing - - -
Accounts Receivable Premium Reduction - - -
Assets Acquired Through Capital Lease - - 10,461,093
Assets Acquired Through Special Assessments - - 52,899
Expenses Paid by Capital Lease - - 4,444,582
Value Received on Trade of Capital Asset - - -
Gifts of Capital Assets - - 167,424
Total Noncash Transactions $ 123,672,000 $ 439,000 $ 15,828,178
The Accompanying Notes are an Integral Part of the Financial Statements
50
Governmental
Business-Type Activities - Enterprise Funds Activities
Workforce Other
Safety and Enterprise Internal
Insurance Funds Total Service Funds
(855,805) 2,931,252 192,139,406 2,698,626
3,726,994 356,267,180 1,170,871,925 30,474,722
$ 2,871,189 $ 359,198,432 $ 1,363,011,331 $ 33,173,348
2,871,189 149,752,740 362,247,225 32,772,230
- 204,371,774 724,241,415 401,118
- 5,073,918 20,149,918 -
- - 216,029,000 -
- - 40,343,773 -
$ 2,871,189 $ 359,198,432 $ 1,363,011,331 $ 33,173,348
71,607,349 48,176,536 (205,502,438) 188,779
1,459,046 7,862,962 82,723,016 11,955,444
- - (4,125,000) -
- (4,326,825) (175,235,825) -
- - (1,620,000) -
- - (705,000) -
- - 4,558,000 -
- (1,449,000) (1,449,000) -
(115,189,458) - (115,189,458) -
- 139,000 139,000 -
- (1,637,212) 10,362,788 -
(249,236) 80,392 2,427,426 -
2,049,607 (1,196,540) 9,269,588 2,791,412
884,518 76,389 5,070,578 1,279,146
1,992,015 24,491,418 (194,619,881) (125,147)
- (6,348) (821,348) -
- 197,271 3,508,271 (195,177)
- 543,230 165,230 186,270
- 447,517 17,764,603 -
(10,166) (1,035,176) (1,079,342) (461,643)
- 429,101 341,216 (43,028)
- (254,652) (6,967,593)
(56,491) (3,134,351) 4,011,172 182,411
- - - (1,035,645)
41,558,000 (1,162,413) 40,395,587 (992,442)
- (587,814) (588,814) -
- (584,249) 2,903,801 (74,026)
79,788 (68,965) (440,869) 10,774
- 681,137 3,485,137 -
- - 443,083
(10,500) (135,227) (146,727) (528,458)
693,283 (24,107) 793,366
847,905 3,236,079 9,225,801 1,352,704
(30,921) 54,618 (194,604) (33,733)
- 89,017 (7,048,983) -
5,988,042 - 5,988,042 -
(59,994,568) 22,725,252 (306,656,739) 14,268,862
$ 11,612,781 $ 70,901,788 $ (512,159,177) $ 14,457,641
20,290,869 380,634 16,870,683 204,741
- - 128,614,000 -
871,080 - 871,080 (61,956)
116,580,928 - 116,580,928 -
109,201,416 - 109,201,416 -
(109,201,416) - (109,201,416) -
- - 10,461,093 -
- - 52,899 -
- - 4,444,582 -
- 16,806 16,806 -
- - 167,424 -
$ 137,742,877 $ 397,440 $ 278,079,495 $ 142,785
The Accompanying Notes are an Integral Part of the Financial Statements
51
STATE OF NORTH DAKOTA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2019
Pension and
Other Employee Investment Private-Purpose
Benefit Trust Trust Trust Agency
Funds Funds Funds Funds
ASSETS
Cash Deposits at the Bank of ND $ 35,545,632 $ - $ 5,908,823 $ 30,631,347
Cash and Cash Equivalents 70,823 - 823,050 5,796,824
Receivables:
Contributions Receivable 40,883,547 - - -
Accounts Receivable - Net - - 185,538 11,033,893
Taxes Receivable - Net - - - 46,901,827
Interest Receivable - Net 22,399,850 709,148 2,170 124
Due from Other Funds 294 - 25 -
Total Receivables 63,283,691 709,148 187,733 57,935,844
Investments, at Fair Value:
Investments at the Bank of ND - - 21,740 29,887,602
Equities 1,495,354,621 142,080,410 - -
Equity Pool 1,936,989,934 - - -
Fixed Income Pool 1,416,295,685 85,590,715 1,317,953 141,619
Cash and Cash Pool 56,555,925 1,744,282 - -
Real Estate Pool 1,037,033,167 43,804,676 - -
Mutual Funds 136,367,609 - 456,003,055 -
Total Investments 6,078,596,941 273,220,083 457,342,748 30,029,221
Invested Securities Lending Collateral 18,737,223 936,877 39,457 -
Capital Assets (Net of Depreciation) 981,301 - - -
Total Assets 6,197,215,611 274,866,108 464,301,811 $ 124,393,236
DEFERRED OUTFLOWS OF RESOURCES
Derived from Pensions 709,618 - -
Total deferred outflows of resources 709,618 - -
LIABILITIES
Accounts Payable 5,889,757 110,089 1,346,717 -
Accrued Payroll 160,737 - - -
Securities Lending Collateral 18,737,223 936,877 39,457 -
Intergovernmental Payable - - - 75,829,927
Tax Refunds Payable - - - 4,051
Due to Other Funds 27,656 - - -
Due to Fiduciary Funds 86 - - -
Amounts Held in Custody for Others 14,795 - - 48,559,258
Compensated Absences Payable 122,228 - - -
Total Liabilities 24,952,482 1,046,966 1,386,174 $ 124,393,236
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions 104,071 - -
Total deferred inflows of resources 104,071 - -
NET Position
Net Position Restricted for:
Pension Benefits 6,171,845,799 - -
Other Employee Benefits 1,022,877 - -
External Investment Pool Participants - 273,819,142 -
Other Purposes - - 462,915,637
Total Net Position Restricted for Pension Benefits and Other Purposes $ 6,172,868,676 $ 273,819,142 $ 462,915,637
The Accompanying Notes are an Integral Part of the Finanacial Statements 52
STATE OF NORTH DAKOTA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2019
Pension and
Other Employee Investment
Benefit Trust Trust Private-Purpose
Funds Funds Trust Funds
ADDITIONS
Contributions:
Employer $ 186,605,926 $ - $ -
Employee 179,354,548 - -
From Participants - - 47,864,276
Transfers from Other Funds 405,963 - -
Transfers from Other Plans 1,521,518 - -
Donations - - 4,554
Total Contributions 367,887,955 - 47,868,830
Investment Income:
Net Change in Fair Value of Investments 202,935,625 9,340,012 (30,027,421)
Interest and Dividends 132,458,629 6,143,404 11,781,512
Less Investment Expense 15,219,295 654,932 3,160
Net Investment Income 320,174,959 14,828,484 (18,249,069)
Securities Lending Activity:
Securities Lending Income 442,229 24,837 1,141
Less Securities Lending Expense 44,927 4,964 -
Net Securities Lending Income 397,302 19,873 1,141
Repurchase Service Credit 9,681,637 - -
Miscellaneous Income (Expense) 1,257,926 - 2,957
Total Additions 699,399,779 14,848,357 29,623,859
DEDUCTIONS
Benefits Paid to Participants 423,427,940 - -
Refunds 17,739,919 - -
Prefunded Credit Applied 11,497,890 - -
Transfer to Other Plans 405,963 - -
Payments in Accordance with Trust Agreements - - 40,035,794
Administrative Expenses 6,775,498 - 3,450,294
Total Deductions 459,847,210 - 43,486,088
Redemption of Units at $1.00 Per Unit - (1,915,480) -
Change in Net Position Held in Trust for:
Pension Benefits 239,334,759 - -
Other Employee Benefits 217,810 - -
External Investment Pool Participants - 12,932,877 -
Other Purposes - - (13,862,229)
Total Change in Net Position 239,552,569 12,932,877 (13,862,229)
Net Position - Beginning of Year 5,933,316,107 260,886,265 476,777,866
Net Position - End of Year $ 6,172,868,676 $ 273,819,142 $ 462,915,637
The Accompanying Notes are an Integral Part of the Financial Statements
53
STATE OF NORTH DAKOTA
Combining Statement of Net Position
Component Units - Proprietary Funds
(Excludes FASB Based Component Units)
June 30, 2019
Public ND
Historical Finance Development State Fair
CHAND Foundation Authority Fund Foundation Total
ASSETS
Current Assets:
Cash and Cash Equivalents $ 2,504,961 $ 424,307 $ - $ 12,472,141 $ 204,300 $ 15,605,709
Accounts Receivable - Net 1,771 231,024 - - - 232,795
Interest Receivable - Net - - - 80,999 - 80,999
Due from Primary Government - - 31,000 - - 31,000
Loans and Notes Receivable - Net - - - 6,838,143 - 6,838,143
Restricted Cash and Cash Equivalents - - 80,856,000 - 11,016 80,867,016
Restricted Investments - - 102,678,000 - - 102,678,000
Restricted Interest Receivable - Net - - 5,933,000 - - 5,933,000
Total Current Assets 2,506,732 655,331 189,498,000 19,391,283 215,316 212,266,662
Noncurrent Assets:
Restricted Investments - - 883,261,000 - - 883,261,000
Investments - 468,362 - 350,000 - 818,362
Due from Primary Government - - 30,000 - - 30,000
Loans and Notes Receivable - Net - - - 2,909,629 1,110,000 4,019,629
Other Noncurrent Assets - 161,200 - - - 161,200
Capital Assets:
Nondepreciable - - - - 1,115,389 1,115,389
Depreciable, Net - 3,098 - 3,738 - 6,836
Total Noncurrent Assets - 632,660 883,291,000 3,263,367 2,225,389 889,412,416
Total Assets 2,506,732 1,287,991 1,072,789,000 22,654,650 2,440,705 1,101,679,078
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding - - 3,802,000 - - 3,802,000
Derived from Pensions - - 113,000 - - 113,000
Total Deferred Outflows of Resources - - 3,915,000 - - 3,915,000
LIABILITIES
Current Liabilities:
Accounts Payable 575,842 8,878 113,000 13,836 13,000 724,556
Accrued Payroll - 2,587 - - - 2,587
Interest Payable - - 4,802,000 - - 4,802,000
Intergovernmental Payable - - 3,000 - - 3,000
Compensated Absences Payable - 13,594 - - - 13,594
Notes Payable - - - - 4,407 4,407
Bonds Payable - - 26,960,000 - - 26,960,000
Unearned Revenue 2,332 47,477 - - - 49,809
Total Current Liabilities 578,174 72,536 31,878,000 13,836 17,407 32,559,953
Noncurrent Liabilities:
Notes Payable - - - - 74,340 74,340
Bonds Payable - - 522,940,000 - - 522,940,000
Net Pension Liability - - 279,000 - - 279,000
Other Noncurrent Liabilities - 136,668 - - - 136,668
Total Noncurrent Liabilities - 136,668 523,219,000 - 74,340 523,430,008
Total Liabilities 578,174 209,204 555,097,000 13,836 91,747 555,989,961
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions - - 21,000 - - 21,000
Total Deferred Inflows of Resources - - 21,000 - - 21,000
Net Position
Net Investment in Capital Assets - 3,098 - 3,738 - 6,836
Restricted for:
Capital Projects - 534,286 - - - 534,286
Debt Service - - 98,810,000 - - 98,810,000
Loan Purposes - - 420,857,000 - - 420,857,000
Endowment Funds-Nonexpendable - 246,001 - - 2,155,492 2,401,493
Unrestricted 1,928,558 295,402 1,919,000 22,637,076 193,466 26,973,502
Total Net Position $ 1,928,558 $ 1,078,787 $ 521,586,000 $ 22,640,814 $ 2,348,958 $ 549,583,117
The Accompanying Notes are an Integral Part of the Financial Statements 54
STATE OF NORTH DAKOTA
Combining Statement of Activities
Component Units - Proprietary Funds
(Excludes FASB Based Component Units)
For the Fiscal Year Ended June 30, 2019
Program Revenues
Operating Capital Net Change Net Position
Charges for Grants and Grants and (Expense) in Net Position End
Functions/Programs Expenses Services Contributions Contributions Revenue Net Position Beginning of Year of Year
CHAND $ 3,257,033 $ 2,365,881 $ 40,875 - $ (850,277) $ (850,277) $ 2,778,835 $ 1,928,558
Historical Foundation 484,650 154,223 127,985 - (202,442) (202,442) 1,281,229 1,078,787
Public Finance Authority 25,639,000 3,265,000 43,609,000 - 21,235,000 21,235,000 500,351,000 521,586,000
ND Development Fund 1,778,003 839,945 51,819 - (886,239) (886,239) 23,527,053 22,640,814
State Fair Foundation 45,367 44,538 60,446 6,000 65,617 65,617 2,283,341 2,348,958
Total Component Units $ 31,204,053 $ 6,669,587 $ 43,890,125 $ 6,000 $ 19,361,659 $ 19,361,659 $ 530,221,458 $ 549,583,117
The Accompanying Notes are an Integral Part of the Financial Statements
55
STATE OF NORTH DAKOTA
Index
Page
Note 1 - Summary of Significant Accounting Policies ................................................................... 58
A. Reporting Entity ..................................................................................................................... 58
B. Government-wide and Fund Financial Statements ............................................................... 59
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation .............. 60
D. General Budgetary Policies and Procedures ........................................................................ 62
E. Cash and Cash Equivalents .................................................................................................. 62
F. Investments ........................................................................................................................... 63
G. Securities Lending ................................................................................................................. 64
H. Interfund Activity and Balances ............................................................................................. 64
I. Inventories and Prepaid Items ............................................................................................... 64
J. Bond Premiums / Discounts .................................................................................................. 65
K. Capital Assets ........................................................................................................................ 65
L. Deferred Outflows of Resources ........................................................................................... 66
M. Lease Commitments .............................................................................................................. 66
N. Federal Funds Purchased ..................................................................................................... 66
O. Claims/Judgments Payable ................................................................................................... 66
P. Compensated Absences ....................................................................................................... 66
Q. Deposits ................................................................................................................................. 66
R. Net Pension Liability .............................................................................................................. 67
S. Net Other Post-Employment Benefits Liability ...................................................................... 67
T. Deferred Inflows of Resources .............................................................................................. 67
U. Net Position/Fund Balance .................................................................................................... 68
V. Revenues and Expenditures/Expenses................................................................................. 68
W. Estimates ............................................................................................................................... 69
Note 2 - Restatements ....................................................................................................................... 69
Note 3 - Detailed Notes on Account Balances ................................................................................ 69
A. Deposits ................................................................................................................................. 69
B. Investments ........................................................................................................................... 70
C. Securities Lending ................................................................................................................. 79
D. Endowment Funds ................................................................................................................. 79
E. Receivables ........................................................................................................................... 80
F. Reverse Repurchase Agreements ........................................................................................ 81
G. Interfund Accounts and Transfers ......................................................................................... 81
H. Capital Assets ........................................................................................................................ 84
I. Operating Leases .................................................................................................................. 87
J. Capital Leases ....................................................................................................................... 87
K. Deferred Outflows of Resources ........................................................................................... 88
L. Long-Term Debt..................................................................................................................... 88
M. Arbitrage Rebate Payable ..................................................................................................... 95
N. Deferred Inflows of Resources .............................................................................................. 95
O. Fair Value of Financial Instruments ....................................................................................... 95
Note 4 - Net Position .......................................................................................................................... 99
Note 5 - Fund Balance ....................................................................................................................... 99
56
Notes To The Financial Statements
Page
Note 6 - Retirement Systems .......................................................................................................... 101
A. Description of Plans ............................................................................................................. 101
B. Summary of Significant Accounting Policies and Plan Asset Matters ................................. 107
C. Funding Status and Progress .............................................................................................. 109
D. Single Employer Pension Plans .......................................................................................... 113
E. Cost Sharing Employer Pension Plans................................................................................ 116
F. Pension Summary ............................................................................................................... 118
G. Defined Contribution Plan .................................................................................................... 118
H. Teachers’ Insurance Annuity Association ........................................................................... 119
Note 7 - Post-Retirement Benefits .................................................................................................. 119
A. Implicit Subsidy Unfunded Plan ........................................................................................... 119
B. Retiree Health Insurance Credit – Plan Information ............................................................ 120
C. Retiree Health Insurance Credit – State’s Share ................................................................ 122
D. Job Service North Dakota – Met Life Insurance Benefit ...................................................... 123
E. OPEB Summary .................................................................................................................. 125
Note 8 - Deferred Compensation Plan ........................................................................................... 125
Note 9 - PERS Uniform Group Insurance Program ...................................................................... 126
Note 10 - Segment Information ......................................................................................................... 126
Note 11 - Major Component Unit Transactions ............................................................................... 127
Note 12 - Financial Instruments With Off-Balance-Sheet Risk ...................................................... 132
Note 13 - Interest Rate Swap............................................................................................................. 133
Note 14 - Significant Concentrations of Credit Risk ...................................................................... 138
Note 15 - Risk Management .............................................................................................................. 138
Note 16 - Public Entity Risk Pools ................................................................................................... 140
A. General ................................................................................................................................ 140
B. Reconciliation of Claims Liabilities ...................................................................................... 141
Note 17- Bank of North Dakota ........................................................................................................ 141
Note 18 - Commitments and Contingencies ................................................................................... 142
A. Long-Term Commitments .................................................................................................... 142
B. Litigation .............................................................................................................................. 143
C. Questioned Costs ................................................................................................................ 143
Note 19 - Tobacco Settlement........................................................................................................... 144
Note 20 - Termination Benefits ......................................................................................................... 144
Note 21 - Subsequent Events ........................................................................................................... 144
Note 22 - New Pronouncements ....................................................................................................... 145
57
STATE OF NORTH DAKOTA
NOTES TO THE FINANCIAL STATEMENTS
For the Fiscal Year Ended June 30, 2019
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The primary authority for the State’s accounting and reporting requirements is the Office of Management and Budget.
The Office of Management and Budget has adopted the pronouncements of the Governmental Accounting Standards
Board (GASB), which is the nationally accepted standard-setting body for establishing governmental accounting and
financial reporting principles. The more significant of the State’s accounting policies are as follows:
A. REPORTING ENTITY
For financial reporting purposes, the State of North Dakota has included all funds, organizations, agencies, boards and
commissions that make up its legal entity. The State has also included all potential component units for which it is
financially accountable, and other organizations for which the nature and significance of their relationship with the State
are such that exclusion would cause the State’s financial statements to be misleading or incomplete. The Governmental
Accounting Standards Board has set forth criteria to be considered in determining financial accountability. These criteria
include appointing a voting majority of an organization’s governing body and (1) the ability of the State to impose its will
on that organization or (2) the potential for the organization to provide specific financial benefits to, or impose specific
financial burdens on the State.
As required by accounting principles generally accepted in the United States of America, these financial statements
present the State of North Dakota (the primary government) and its component units. The component units are included
in the State’s reporting entity because of the significance of their operational or financial relationships with the State.
BLENDED COMPONENT UNITS
These component units are entities that are legally separate from the State, but are so intertwined with the State that
they are, in substance, the same as the State. They are reported as part of the State and blended into the appropriate
fund types.
Building Authority (Debt Service Fund and Capital Projects Fund) - The Building Authority was created by the
Legislature as a separate instrumentality of the State. Its purpose is to promote the general welfare of the citizens of the
State by providing financing for use by the State in altering, repairing, maintaining or constructing buildings and making
any improvements connected to State buildings. The Industrial Commission, which consists of the governor, the attorney
general, and the commissioner of agriculture, is the governing board of the Building Authority. The funds of the Building
Authority were audited by other independent auditors for the fiscal year ended June 30, 2019, and their report has been
previously issued under a separate cover.
DISCRETELY PRESENTED COMPONENT UNITS
These component units are entities that are legally separate from the State, but are financially accountable to the State.
The component units’ columns of government-wide financial statements include the financial data of these entities.
MAJOR COMPONENT UNITS
Comprehensive Health Association (Proprietary Fund Type) – The Association was established by the Legislature
with participating membership consisting of those insurance companies, licensed or authorized to do business in the
State. It provides low cost access to health insurance coverage for residents of the State who are denied adequate
health insurance and are considered uninsurable. Under North Dakota Century Code, the Majority Leader of the Senate
appoints one member of the Senate and the House of Representatives appoints one member of the House to the eight-
member board. The Association was audited by other independent auditors for the calendar year ended December 31,
2018, and their report has been previously issued under a separate cover.
State Historical Society of North Dakota Foundation – The mission of the State Historical Society of North Dakota
Foundation is to provide fundraising and membership development activities to support the State Historical Society of
North Dakota which preserves and promotes the heritage of North Dakota and its people. The Fund of the State
Historical Society of North Dakota Foundation were audited by other independent auditors for the fiscal year ended June
30, 2019, and their report has been previously issued under a separate cover.
58
STATE OF NORTH DAKOTA
Public Finance Authority (Proprietary Fund Type) – The Finance Authority was created by the Legislature as a
separate agency of the State. The purpose of the Finance Authority is to make funds available for borrowing by North
Dakota political subdivisions through the issuance of its bonds and the purchase of municipal securities of the political
subdivisions. The Finance Authority has been granted all powers required in order to accomplish this purpose and is
under the control and management of the Industrial Commission. The Fund was audited by other independent auditors
for the calendar year ended December 31, 2018, and their report has been previously issued under a separate cover.
North Dakota Development Fund, Inc. (Proprietary Fund Type) – The Development Fund was established as a
statewide nonprofit development corporation with the authority to take equity positions in; to provide loans to; or to use
other innovative financing mechanisms to provide capital for new or expanding businesses in North Dakota or relocating
businesses to North Dakota. A board of directors consisting of eight members, all of whom are appointed by the
governor, manages the corporation. The deputy director of the Department of Commerce (a State agency) is the
corporation's chief executive officer. The director of the Department of Commerce (governor-appointed cabinet position)
is responsible for developing rules, subject to the approval of the board of directors, necessary to implement the
administration of the corporation. The Fund was audited by other independent auditors for the fiscal year ended June 30,
2019, and their report has been previously issued under a separate cover.
North Dakota State Fair Foundation – The mission of the North Dakota State Fair Foundation is to develop lifelong
relationships with donors to secure philanthropic gifts that will enhance and support the work of the North Dakota State
Fair. The Fund of the North Dakota State Fair Foundation were audited by other independent auditors for the fiscal year
ended September 30, 2018, and their report has been previously issued under a separate cover.
Major and Non-major University System Foundations (Proprietary Fund Type) – The foundations are legally
separate, tax-exempt organizations providing support and recognition to the respective colleges and universities through
a variety of programs and activities. The foundations are normally managed by a board of directors made up primarily of
alumni, friends or leading members of the communities. The component unit financial statements are presented under
Financial Accounting Standards Board (FASB) standards. As such, certain disclosures are not reflected for the Major
University System Foundation in the major component unit disclosures and no disclosures are included for the Non-major
University System Foundation. A complete set of financial statements can be obtained at the North Dakota University
System office at 600 E. Boulevard Avenue, #10, Bismarck, ND 58505.
Complete financial statements for each of the other individual component units may be obtained at the entity’s
administrative offices as follows:
Building Authority Public Finance Authority
600 E. Boulevard Ave., 14th Floor 1200 Memorial Highway
Bismarck, ND 58505-0840 Bismarck ND 58504
Comprehensive Health Associations North Dakota Development Fund, Inc.
4510 13th Ave. South 1600 E. Century Ave., #2
Fargo, ND 58121 Bismarck, ND 58503
State Historical Society of North Dakota Foundation North Dakota State Fair Foundation
P.O. Box 1976 P.O. Box 1796
Bismarck, ND 58502-1976 Minot, ND 58702-1796
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The Statement of Net Position and Statement of Activities report information on all non-fiduciary activities of the primary
government and its component units. Primary government activities are distinguished between governmental and
business-type activities.
Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange
revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or
services.
The Statement of Net Position presents the reporting entity’s non-fiduciary assets, deferred outflows of resources,
liabilities, and deferred inflows of resources, with the difference reported as net position. Net position is reported in three
categories:
59
STATE OF NORTH DAKOTA
Net investment in capital assets consists of capital assets, net of accumulated depreciation and reduced by
outstanding balances for bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement
of those assets.
Restricted net position result when constraints placed on net position use are either externally imposed by creditors,
grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. Net
position restricted by enabling legislation are subject to change by a majority vote of the Legislative Assembly.
Unrestricted net position consist of net position that do not meet the definition of the two preceding categories.
Unrestricted net position often are designated, to indicate that management does not consider them to be available for
general operations. Unrestricted net position often have constraints on resources which are imposed by management,
but can be removed or modified.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are
offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function. Program
revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function. Taxes and other items not meeting the definition of program revenues are
instead reported as general revenue.
FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though
the latter are excluded from the government-wide statements. Major individual governmental funds and major individual
proprietary funds are reported as separate columns in the fund financial statements, with non-major funds being
combined into a single column.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
MESUREMENT FOCUS AND BASIS OF ACCOUNTING
The government-wide statements are reported using the economic resources measurement focus and the accrual basis
of accounting, as are the proprietary and fiduciary fund (agency funds are excluded as they have no measurement focus)
financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of cash flows.
The State follows the pronouncements of the Governmental Accounting Standards Board (GASB), which is the nationally
accepted standard-setting body for establishing accounting principles generally accepted in the United States of America
for governmental entities.
Governmental fund statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as they become susceptible to accrual; generally when they are
both measurable and available. Revenues are considered to be available when they are collected within the current
period or soon enough thereafter to pay liabilities of the current period.
The State considers tax revenues to be available if they are collected within 60 days of the end of the current fiscal year
end. Other revenues are considered to be available if received within one year after the fiscal year end. Major revenues
that are determined to be susceptible to accrual include interest, federal grants-in-aid, and taxpayer-assessed taxes such
as income, sales, corporate, excise, motor fuel taxes and unemployment compensation contributions. Revenues earned
under the terms of reimbursement agreements with other governments or private sources are recorded at the time the
related expenditures are made if other eligibility requirements have been met. Sales and use taxes are accrued based
upon filings received and an estimate of filings due by June 30. Net income taxes from individuals and corporations are
accrued based on current income earned by the taxpayer before June 30. Quarterly filings, withholding statements, and
other historical data are used to estimate income. The revenue is accrued net of an allowance for uncollectible taxes.
Unearned revenue is recorded for receivables that are measurable but not available at year-end.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures
related to debt service, compensated absences, and claims and judgments, are recorded only when payment is due and
payable.
60
STATE OF NORTH DAKOTA
FINANCIAL STATEMENT PRESENTATION
The State reports the following major governmental funds:
The General Fund is the principal operating fund of the State.
The Federal Fund accounts for all the financial resources from the federal government.
The State Special Revenue Fund accounts for activities from state sources, which are restricted legally or
administratively for the particular costs of an agency or program.
The State reports the following major enterprise funds:
The Bank of North Dakota Fund finances economic development throughout the state, participates in loans with North
Dakota financial institutions, and holds interest-bearing deposit accounts for state and political subdivisions of North
Dakota.
The Housing Finance Agency Fund is authorized to issue bonds to make loans to mortgage lenders for qualified
residential mortgage loans and to make mortgage and construction loans for multi-family housing within the State of
North Dakota.
The University System Fund accounts for all financial transactions of the colleges and universities that compose the
University System of North Dakota.
The Workforce Safety & Insurance Fund is financed entirely by premiums assessed to the employers of North Dakota
and provides no-fault medical and disability insurance to all North Dakota employees.
Additionally, the State reports the following fund types:
GOVERNMENTAL FUND TYPES
General Fund accounts for all governmental financial resources, except for those required to be accounted for in other
funds.
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted
or committed to expenditure for specified purposes other than debt service or capital projects.
Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to
expenditure for principal and interest.
Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned
to expenditure for capital outlays including the acquisition or construction of capital facilities and other capital assets.
Capital project funds exclude those types of capital related outflows financed by proprietary funds or for assets that will
be held in trust for individuals, private organizations, or other governments.
Permanent Funds report resources that are legally restricted to the extent that only earnings, and not principal, may be
used for purposes that benefit the government or its citizenry, such as the common schools within the state.
PROPRIETARY FUND TYPES
Enterprise Funds account for those business-like State activities that provide goods/services to the public, financed
primarily through user charges. They are also used to account for operations where the governing body has decided that
periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance,
public policy, management control, accountability and other purposes. The State’s loan programs, Mill and Elevator, and
Fair are reported in this type.
Internal Service Funds account for the financing of goods and/or services provided by one department or agency to
another department or agency of a government, or to other governments, on a cost-reimbursement basis. These goods
and services include motor pool services; printing, reproduction and mailing services; information technology; and risk
management services. In the government-wide statements, internal service funds are included with governmental
activities.
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FIDUCIARY FUND TYPES
Pension and Other Employee Benefits Trust Funds account for resources that are required to be held in trust for the
members and beneficiaries of the State’s defined benefit pension plans, defined contribution plan, deferred
compensation plan, flexcomp plan, and other post-employment benefit plans.
Investment Trust Funds account for the transactions, assets, liabilities, and fund equity of the external pool participants
(City of Bismarck, City of Grand Forks, City of Grand Forks Park District, ND Association of Counties, City of Fargo
Fargodome, North Dakota State Board of Medicine, Petroleum Tank Release Compensation Fund, Lewis and Clark
Interpretive Center Endowment Fund and Retirement and Investment Office Investments). The State Investment Board
(SIB) provides administrative services for the external pool participants. SIB issues a publicly available financial report
that may be obtained by writing to the Retirement and Investment Office, 3442 East Century Avenue, Bismarck, North
Dakota 58503. Investment Trust Funds are accounted for in essentially the same manner as Proprietary Funds.
Private Purpose Trust Funds account for resources of all other trust arrangements in which principal and income benefit
individuals, private organizations, or other governments. Examples include student donations, the State’s college savings
plan, and a remediation trust.
Agency Funds account for assets held by the State as an agent for other governmental units, or other organizations, and
do not involve measurement of results of operations. Examples of funds in this category include state agency funds for
bonding, tax collection, child support disbursement, and funds held for others.
D. GENERAL BUDGETARY POLICIES AND PROCEDURES
The State operates through a biennial appropriation that represents departmental appropriations recommended by the
governor and presented to the Legislative Assembly at the beginning of each legislative session. The Legislative
Assembly enacts the budgets of the various state departments through passage of specific appropriation bills. The
governor has line item veto powers over all appropriations subject to legislative override.
Once passed and signed, the appropriation bill becomes the departments' financial plan for the next two years. Changes
to the appropriation are limited to Emergency Commission authorization, initiative, allotment, or referendum action. The
Emergency Commission can authorize receipt of federal or other moneys not appropriated by the Assembly if the
Assembly did not indicate intent to reject the money. The Emergency Commission may authorize pass-through federal
funds from one state agency to another. The Emergency Commission may authorize the transfer of expenditure authority
between appropriated line items. The Legislature has also passed appropriation laws that authorize directors of certain
state agencies to transfer appropriation authority among the various divisions of their specific agency, subject to the
Budget Section of the North Dakota Legislative Council's approval. Unexpended appropriations lapse at the end of each
biennium, except certain capital expenditures covered under the North Dakota Century Code (NDCC) section 54-44.1-11
and the University System’s unexpended general fund appropriation authority.
The State’s biennial budget is prepared primarily on a cash basis. The State does not use encumbrance accounting. The
legal level of budgetary control is at the agency, appropriation, funding source and expenditure line item level, with
administrative controls established at lower levels of detail in certain instances. The State does not formally budget
revenues, and it does not budget by fund. The State appropriation is defined through the use of specific expenditure line
items. Capital appropriations are generally made at the agency and project level.
North Dakota's Appropriation Act does not present budgets by GAAP fund. Instead, it authorizes General Fund
appropriation authority by agency and Other Budgeted Income appropriation authority by agency. Other budgeted
income includes all budgeted resources, other than the General Fund, and includes some governmental, proprietary, and
fiduciary fund activities.
During the 2017-2019 biennium, there were general, federal and other funds supplemental appropriations totaling
$790,712,092.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for reporting purposes includes cash and short-term, highly liquid investments that are readily
convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value
because of changes in interest rates. This includes investments with original maturity of three months or less. Also cash,
as reported, may be under the control of the State Treasurer or by other administrative bodies as determined by law.
Cash and cash equivalents are presented on the fund balance sheets as "Cash Deposits at the Bank of North Dakota"
and "Cash and Cash Equivalents" to present the unique nature of the relationship between the Bank of North Dakota, an
enterprise fund, and other state agencies.
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Cash Deposits at the Bank of North Dakota – State agency cash balances, as required by law, are pooled by the State
Treasurer and deposited in the Bank of North Dakota, an enterprise fund. These cash balances, in addition to other
agency cash deposited at the Bank of North Dakota, are included on the fund balance sheets as "Cash Deposits at the
Bank of North Dakota". For purposes of the Government-wide Statement of Net Position, these amounts have been
reclassified to internal balances.
Cash and Cash Equivalents – All cash and cash equivalents, (other than cash deposits at the Bank of North Dakota),
as permitted by the North Dakota Century Code, are included on the Government-wide Statement of Net Position as
"Cash and Cash Equivalents".
The State had no cash overdrafts from pooled cash and investments at June 30, 2019.
All interest revenue is allocated to the General Fund unless state law (as outlined in the North Dakota Century Code)
requires allocations of interest to other funds.
F. INVESTMENTS
Investments are reported at fair value. Quoted market prices, when available, have been used to value investments. The
fair value for securities that have no quoted market price represent estimated fair value. International securities are
valued based upon quoted foreign market prices and translated into U.S. dollars at the exchange rate in effect at June
30. In general, corporate debt securities have been valued at quoted market prices or, if not available, values are based
on yields currently available on comparable securities of issuers with similar credit ratings. Mortgages have been valued
on the basis of their future principal and interest payments discounted at prevailing interest rates for similar instruments.
The fair value of real estate investment securities, including timberland, is based on appraisals plus fiscal year-to-date
capital transactions. Publicly traded alternative investments are valued based on quoted market prices. When not readily
available, alternative investment securities are valued using current estimates of fair value from the investment manager.
Such valuations consider variables such as financial performance of the issuer, comparison of comparable companies’
earnings multiples, cash flow analysis, recent sales prices of investments, withdrawal restrictions, and other pertinent
information. Because of the inherent uncertainty of the valuation for these other alternative investments, the estimated
fair value may differ from the values that would have been used had a ready market existed.
The net change in fair value of investments consists of the realized gains or losses and the unrealized increase or
decrease in fair value of investments during the year. Realized gains and losses on sales of investments are computed
based on the difference between the sales price and the original cost of the investment sold.
Unrealized gains and losses are computed based on changes in the fair value of investments between years. Security
transactions are currently accounted for on a trade date basis. Interest income is recorded when earned. Dividend
income is recorded on the ex-dividend date.
Purchases of other state funds' debt issues by the Bank of North Dakota have been recorded as normal business
transactions if they are the result of arms-length transactions.
Investments are presented on the fund balance sheets as "Investments at the Bank of North Dakota" and "Investments"
to present the unique nature of the relationship between the Bank of North Dakota, an enterprise fund, and other state
agencies.
Investments at the Bank of North Dakota – State agency investments, primarily certificates of deposits of the Bank of
North Dakota, are included on the fund balance sheets as "Investments at the Bank of North Dakota.” For purposes of
the Government-wide Statement of Net Position, these amounts have been reclassified to internal balances.
Investments – State agency investments invested at financial institutions other than the Bank of North Dakota are
included on the Government-wide Statement of Net Position as "Investments.” Differences on the Fund Balance Sheets
between the assets, “Cash at the Bank of North Dakota” and “Investments at the Bank of North Dakota,” and the liability,
"Deposits Held for Other Funds," is attributable to timing differences resulting from the Bank of North Dakota having a
different fiscal year end than many of the other state agencies.
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G. SECURITIES LENDING
GASB Statement No. 28 “Accounting and Financial Reporting for Securities Lending Transactions,” establishes
accounting and financial reporting standards for securities lending transactions. The standard requires governmental
entities to report securities lent as assets in their statements of net position. Cash received as collateral and investments
made with that cash must also be reported as both an asset and a liability. The statement also requires the costs of the
securities lending transactions to be reported as expenses separately from income received. In addition, the statement
requires disclosures about the transactions and collateral related to them.
The Agent lends securities of the type on loan at June 30, 2019, for collateral in the form of cash, U.S. government
securities and irrevocable letters of credit. U.S. securities are loaned versus collateral valued at 102% of the market
value of the securities plus accrued interest. Non-U.S. securities are loaned versus collateral valued at 105% of the
market value of the securities plus accrued interest.
Non-cash collateral cannot be pledged or sold unless the borrower defaults. All securities can be terminated on demand
by either the lender or the borrower, although the average term of the loans State’s loans was approximately 71 days as
of June 30, 2019. Cash open collateral is invested in a short term investment pool, which had an interest sensitivity of 3
days as of this statement date. This pool is valued based on amortized cost. There were no violations of legal or
contractual provisions, no borrower or lending agent default losses known to the securities lending agent. There are no
dividends or coupon payments owing on the securities lent. Securities lending earnings are credited to participating
clients on approximately the fifteenth day of the following month.
Indemnification deals with the situation in which a client’s securities are not returned due to the insolvency of a borrower
and the Agent has failed to live up to its contractual responsibilities relating to the lending of those securities. The Agent’s
responsibilities include performing appropriate borrower and collateral investment credit analyses, demanding adequate
types and levels of collateral, and complying with applicable Department of Labor and Federal Financial Institutions
Examination Council regulations concerning securities lending.
For securities loaned at fiscal year end, the State has no credit risk exposure to borrowers because the amounts the
State owes the borrowers exceeds the amounts the borrowers owe the State.
H. INTERFUND ACTIVITY AND BALANCES
INTERFUND ACTIVITY
As a general rule, the effect of interfund activity has been eliminated from the government-wide statements. Exceptions
to this rule are: 1) activities between funds reported as governmental activities and funds reported as business-type
activities and 2) activities between funds that are reported in different functional categories in either the governmental or
business-type activities column. Elimination of these activities would distort the direct costs and program revenues for the
functions concerned.
In the fund financial statements, transfers represent flows of assets (such as goods or cash) without equivalent flows of
assets in return or a requirement for repayment. Residual transfer amounts exist in the Government-wide Statement of
Activities due to different fiscal year ends of various agencies included in business-type activities.
INTERFUND BALANCES
Interfund receivables and payables have been eliminated from the Statement of Net Position, except for the residual
amounts due between governmental and business-type activities.
I. INVENTORIES AND PREPAID ITEMS
Inventories of Governmental Funds are valued at cost and are recognized principally using the average cost method.
Generally, the cost of Governmental Funds' inventories is recorded as an expenditure when consumed rather than when
purchased.
Inventories of Proprietary Funds consist primarily of grain inventories from the North Dakota Mill and Elevator
Association. Grain inventories are valued at the June 30 Minneapolis grain market values less freight costs to
Minneapolis. Flour, feed and resale inventories are valued at ingredient cost plus manufacturing costs incurred in their
production. Proprietary Funds expense the cost of consumable supplies when used.
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Generally, inventories of University System Funds are valued at the lower of cost or fair market value. Cost is generally
determined on the first in/first out, or moving weighted average method. Inventories consist of food, books, and other
merchandise held for resale in auxiliaries and unrestricted physical plant supplies.
Prepaid items reflect payments for costs applicable to future accounting periods. The cost of governmental prepaid items
are recorded as expenditures when purchased.
Other government fund inventories and prepaid items are reflected as a reservation of fund balance on the balance
sheet.
J. BOND PREMIUMS / DISCOUNTS
In the governmental funds, bond discounts and premiums are treated as period costs in the year of issue. Bond
discounts and premiums are shown as an “other financing source (use)” in the statement of revenues, expenses and
changes in fund balance.
In the proprietary funds, bond premiums and discounts are deferred and amortized over the term of the bonds using the
effective interest method. The unamortized discount is shown on the statement of net position as a reduction of the
bonds payable, and the amortization is included in the statement of revenues, expenses and changes in fund balance as
interest expense.
K. CAPITAL ASSETS
Capital assets, which include land, buildings, equipment, intangibles (software, easements and other), construction in
progress and infrastructure assets, are valued at historical cost or at estimated historical cost if actual historical cost is
not available. Donated capital assets are valued at their acquisition value on the date of donation. Where necessary,
estimates of original cost are derived by factoring price levels from the current period to the time of acquisition. Library
books are not capitalized as capital assets except for the University System.
All other capital assets with an original cost of $5,000 or more per unit and an estimated useful life in excess of one year
are capitalized and reported in the applicable government or business-type activities columns in the government-wide
financial statements. Exceptions include: infrastructure reported by the Department of Transportation, the threshold is
$100,000 and intangible assets such as easements, water rights, patents and trademarks, the threshold is $25,000.
Capital asset costs include the purchase price or construction cost, plus the costs necessary to place the asset in its
intended location and condition for use. In governmental activities, interest costs on self-constructed assets are not
capitalized. In business-type activities, interest costs (if material) on self-constructed assets are also included in the cost.
The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the
borrowing until completion of the project with interest earned on invested proceeds over the same period. Capitalized
interest is amortized on the straight-line basis over the estimated useful life of the asset. Normal maintenance and repair
costs that do not materially add to the value or extend the life of the asset are not capitalized.
Collections of works of art and historical treasures are not capitalized if the following three criteria are met: (1) Held for
public exhibition, education, or research in furtherance of public service, rather than financial gain; (2) Protected, kept
unencumbered, cared for, and preserved; (3) Subject to organizational policy that requires the proceeds from sales of
collection items to be used to acquire other items for collections. The State’s non-capitalized collections include the
historical artifacts at the various state museums and historical sites, and monuments and other art throughout the capital
grounds. Assets that do not meet all three criteria, or that were capitalized as of June 30, 1999, are capitalized and
included in the government-wide financial statements.
Infrastructure consists of major statewide public systems and items attached thereto such as freeways, freeway lighting
systems, freeway drainage systems, freeway signs, bridges, bridge lighting systems, and sewer systems, including those
infrastructure assets acquired prior to June 30, 1980. Infrastructure is reported in the applicable governmental or
business-type activities columns in the government-wide financial statements. The Department of Transportation uses
the first-in first-out method to remove the capitalized cost of a replaced road along with corresponding accumulated
depreciation.
Capital assets in Governmental Funds are recorded as expenditures in the funds used to acquire or construct them in the
governmental fund financial statements. Capital assets, along with accumulated depreciation and depreciation expense,
which includes amortization of intangible assets, are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements.
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Land and construction in progress are not depreciated. With the exception of infrastructure reported by the Department of
Transportation (which uses the composite method), other capital assets are depreciated using the straight-line method
over the following estimated useful lives:
Assets Years
Buildings 10-50
Infrastructure 10-50
Furniture, Automobiles, and Equipment 3-20
Intangibles 3-99
L. DEFERRED OUTFLOWS OF RESOURCES
Deferred outflow of resources represents a consumption of net position by the government that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of
resources are reported in the applicable governmental or business-type activities columns, or in the component units
column on the government-wide Statement of Net Position.
M. LEASE COMMITMENTS
The State leases land, office facilities, office and computer equipment, and other assets. Leases are classified according
to GASB 62. Many of these leases have fiscal funding clauses; however, these clauses have no effect on classifying
these leases for accounting purposes. Leases which represent acquisitions are classified as capital leases, and the
related assets and liabilities are recorded in the financial statements at the inception of the lease. Other leases are
classified as operating leases with the lease payments recorded as expenditures or expenses during the life of the lease.
N. FEDERAL FUNDS PURCHASED
Federal Funds Purchased represent federal funds borrowed by the Bank of North Dakota from member banks generally
on an overnight basis at the federal funds rate.
O. CLAIMS/JUDGMENTS PAYABLE
Claims/Judgments Payable is primarily Workers Compensation Claims Incurred But Not Yet Reported (IBNR) by the
claimants as well as claims related to various litigation matters.
P. COMPENSATED ABSENCES
ANNUAL LEAVE
State employees accrue vested annual leave at a variable rate based on years of service. Teachers employed by the
State do not receive annual leave. In general, accrued annual leave cannot exceed 30 days at each year end, as set by
the agency. The amount of annual leave earned ranges between one and two days per month, and is fixed by the
employing unit per section 54-06-14 of the NDCC.
The governmental fund financial statements recognize annual leave when the liability is incurred and payable from
available expendable resources. This normally occurs only if an employee has unused reimbursable leave still
outstanding at the time of their termination. The government-wide financial statements present the cost of accumulated
annual leave as a liability. Proprietary and Fiduciary Funds recognize the expense and accrued liability when the annual
leave is earned.
SICK LEAVE
The North Dakota Century Code, section 54-06-14, states employees accrue sick leave at the rate of one to a maximum
of one and one-half working days per month of employment without limitation on the amount that can be accumulated.
Employees vest at ten years of creditable service, at which time the State is liable for ten percent of the employee's
accumulated unused sick leave. The governmental fund financial statements recognize sick leave as it is incurred. The
government-wide financial statements present the estimated cost of sick leave as a liability after an employee has been
employed by the State for five consecutive years.
Q. DEPOSITS
The following two liability line items are presented in the Government-wide Statement of Net Position and/or fund
financial statements:
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Deposits Held For Other Funds. "Deposits Held for Other Funds" are those deposits held by the Bank of North Dakota
for other funds included in the reporting entity and shown on the fund financial statements. For purposes of the
Government-wide Statement of Net Position, these amounts have been reclassified to internal balances.
Other Deposits. "Other Deposits" are those deposits held by the Bank of North Dakota for non-reporting entity third
parties. It also includes deposits held for students of the University System.
Differences on the fund balance sheets between the liability "Deposits Held for Other Funds" and the assets "Cash
Deposits and Investments at the Bank of North Dakota" are attributable to timing differences resulting from the Bank of
North Dakota having a different accounting year end than many other state agencies.
R. NET PENSION LIABLITY
For purposes of measuring the net pension liability and deferred outflows/inflows related to pension, and pension
expense, information about the fiduciary net position of the North Dakota Public Employee Retirement System (PERS),
North Dakota Highway Patrolmen’s Retirement System (NHPRS), Retirement Plan for the Employees of Job Service
North Dakota (JSND) and North Dakota Teachers’ Fund for Retirement (TFFR) and additions to / deductions from PERS,
NDHPRS, JSND and TFFR’s fiduciary net position have been determined on the same basis as they are reported for
PERS, NDHPRS, JSND and TFFR. For this purpose, benefit payments (including refunds of employee contributions) are
recognized when due and payable in accordance with the benefit terms. The primary government’s proportionate share
of pension amounts were further reallocated to the propriety funds (business-type activities) based on the amount of
employer contributions paid by each proprietary fund. Pension investments are reported at fair value.
S. NET OTHER POST EMPLOYMENT BENEFITS LIABILITY
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources
related to OPEB, and OPEB expense, information about the fiduciary net position of the North Dakota Public Employees
Retirement System (NDPERS) and additions to/deductions from NDPERS’ fiduciary net position have been determined
on the same basis as they are reported by NDPERS. For this purpose, benefit payments are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
Job Service North Dakota engaged an actuary to determine the net OPEB liability, deferred outflows of resources and
deferred inflow of resources related to OPEB and OPEB expense for its Met Life Insurance Benefit plan.
T. DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources represent an acquisition of net position that applies to a future period, and so will not be
recognized as an inflow of resources (revenue) until that time. Deferred inflows of resources are reported in the
applicable governmental or business-type activities columns or in the component units column on the government-wide
Statement of Net Position. Deferred inflows of resources of governmental funds, proprietary fund, and discrete
component units are reported in detail in their respective fund statements.
U. NET POSITION/FUND BALANCE
The difference between fund assets and liabilities is “Net Position” on the government-wide, proprietary, and fiduciary
fund statements, and “Fund Balance” on governmental fund statements.
CLASSIFICATIONS
Fund balance classifications for governmental funds are reported in two general classifications, nonspendable and
spendable. Nonspendable represents the portion of fund balance that is not in spendable form such as inventories and
prepaids. Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned.
The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by the
State constitution and external parties, such as the federal government, or through enabling legislation.
The committed fund balance classification includes amounts that can be used only for the specific purposes determined
by a formal action of the government’s highest level of decision-making authority, the state’s legislature, through
legislation, that is not considered as enabling legislation, passed into law.
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Assigned fund balance classifications are used when the amounts are to be used for specific purposes but do not meet
the criteria to be classified as restricted or committed. The assignment of fund balance is generally initiated by the
executive branch and later appropriated by the Legislature for a specific purpose. In governmental funds other than the
general fund, assigned fund balance also represents the remaining amount that is not restricted or committed.
Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable
amounts not contained in the other classifications. In other funds, the unassigned classification would only be used to
report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted,
committed, or assigned.
The State generally segregates restricted, committed, and assigned resources by individual funds within the
governmental funds. When resources meeting more than one of these classifications are comingled within an individual
fund, the assumed order of spending is restricted first, committed second, assigned third, and finally, unassigned.
BUDGET STABILIZATION FUND
North Dakota Century Code (NDCC) section 54-27.2-02 requires any amount in the state general fund in excess of sixty-
five million dollars at the end of any biennium to be deposited in the Budget Stabilization Fund. Any interest or earnings
of the fund must be deposited in the fund per NDCC section 54-27.2-01. However, any amounts provided by law for
deposit in the fund and any interest or earning of the fund which would bring the balance in the fund to an amount greater
than nine and half percent of the current biennial state general fund budget, as finally approved by the most recently
adjourned special or regular session of the legislative assembly, may not be deposited or retained in the fund but must
be deposited instead in the state general fund.
NDCC section 54-27.2-03 states that if general fund revenue projections for the biennium will be at least two and one-
half percent less than estimated by the most recently adjourned special or regular session of the legislative assembly,
and if the governor orders a transfer, which must be reported to the budget section of the legislative management, the
state treasurer shall transfer the appropriate funds from the budget stabilization fund to the state general fund to offset
the decrease in general fund revenues. The amount transferred upon order of the governor may not exceed the
difference between an amount two and on-half percent below the general fund revenue projections for the biennium. The
Budget Stabilization Fund, fund balance at June 30, 2019 was $118,647,704.
V. REVENUES AND EXPENDITURES/EXPENSES
In the Government-wide Statement of Activities, revenues and expenses are segregated by activity (governmental or
business-type), then further by function for governmental activities (e.g., general government, education, health and
human services, etc.). Additionally, revenues are classified between program and general revenues. Program revenues
include 1) charges to customers or applicants for goods or services, 2) operating grants and contributions, and 3) capital
grants and contributions. Internally dedicated resources are reported as general revenues, rather than as program
revenue. General revenues include all taxes and money from tobacco settlements. Certain indirect costs are included in
the program expenses reported for individual functions.
In the government-wide financial statements, revenues are reported by source and are further classified as either
“general purpose” or “restricted”. General purpose revenues are available to fund any activity accounted for in the fund.
Restricted revenues are, either by State law or by outside restriction (e.g., federal grants), available only for specified
purposes. When both general purpose and restricted funds are available for use, it is the State’s policy to use restricted
resources first. In the governmental fund financial statements, expenditures are reported by character: “Current,”
“Intergovernmental-revenue Sharing,” “Capital Outlay,” or “Debt Service.” Current expenditures are sub-classified by
function and are for items such as salaries, grants, supplies, and services.
Capital outlay includes expenditures for real property or infrastructure (e.g., highways). Intergovernmental-revenue
sharing accounts for the distribution of certain tax revenues that are shared with local units based upon constitutional and
statutory requirements. Debt service includes both interest and principal outlays related to bonds and payments on
capitalized leases.
Revenues and expenses of proprietary funds are classified as operating or nonoperating and are sub classified by object
(e.g., salaries, depreciation, and purchases for resale). Operating revenues consist of sales of goods and services,
quasi-external operating transactions with other funds, grant revenues for specific activities that are considered to be
operating activities of the grantor, receipts from other agencies for reimbursement of operating transactions, and other
miscellaneous revenue that should be classified as operating. Grants that would qualify as an operating activity are those
that do not subsidize an existing program, rather they finance a program the agency would otherwise not undertake. For
certain loan and investment programs, revenue that would normally be classified as non-operating should be classified
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as operating. Examples of this would include interest and investment income. All other revenues that do not meet the
above criteria should be classified as non-operating.
W. ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2 - RESTATEMENTS
The changes to beginning net position are summarized in the following table (expressed in thousands):
Internal
Government-wide Business-type Service
Gov’t Activities Activities Funds
June 30, 2018, net position, as previously
reported $ 18,516,218 $ 3,917,941 $ 103,786
Prior period adjustments:
Correction of Errors (5,955) - 3,951
Change in Accounting Method:
Housing Finance - 4,103 -
June 30, 2018, net position, as restated $ 18,510,263 $ 3,922,044 $ 107,737
A. CORRECTION OF ERRORS
The beginning net position of the Government-wide governmental activities were restated due to an understatement of
expenses of $3.431 million and an overstatement of construction in progress of $2.524 million in the prior year. The
Internal Service funds were restated for an overstatement of expenses of $3.951 million in the prior year.
B. CHANGE IN ACCOUNTING METHOD
In previous years, Housing Finance accounted for bond premiums and discounts under the straight-line method. In 2019,
Housing Finance changed its method of accounting for bond premiums and discounts to the effective interest rate
method. As a result of the differences in methods, a prior period adjustment of $4.103 million was recorded to the
Business-type activities to decrease premiums on bond funds and increase net position as of July 1, 2018.
NOTE 3 - DETAILED NOTES ON ACCOUNT BALANCES
A. DEPOSITS
CUSTODIAL CREDIT RISK
The State minimizes custodial credit risk by restrictions set forth in state statute. Custodial credit risk is risk associated
with the failure of a depository financial institution. In the event of a depository financial institution’s failure, the State
would not be able to recover its deposits or collateralized securities that are in the possession of the outside parties.
State law generally requires that all State funds be deposited in the Bank of North Dakota. NDCC 21-04-01 provides that
public funds belonging to or in the custody of the State shall be deposited in the Bank of North Dakota. Also, NDCC
6-09-07 states, “all state funds . . . must be deposited in the Bank of North Dakota” or must be deposited in accordance
with constitutional and statutory provisions. The State does not have a formal policy that addresses custodial credit risk
for deposits.
At June 30, 2019, the bank balance of the primary government’s deposits was $510,777,595. Of the bank amount,
$195,278,000 was uncollateralized and uninsured.
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STATE OF NORTH DAKOTA
There were significant concentrations of uninsured and uncollateralized deposits in the Bank of North Dakota and
University System at June 30, 2019. Their uninsured and uncollateralized deposits totaled $195.3 million and $23
thousand, and their bank deposits totaled $196.1 million and $11.4 million, respectively.
At June 30, 2019, the bank balance of the major component units’ deposits was $96,472,725. Of the bank amount,
$93,328,141 was uncollateralized and uninsured.
The internal receivable amount in the governmental activities column in the Statement of Net Position includes Cash and
Investments at the Bank of North Dakota for governmental activities. The internal payable amount in the business-type
activities column includes deposits the Bank has for governmental activities. Because the Bank has a different fiscal year
end, these internal balances do not equal.
B. INVESTMENTS
The investment policies of the State of North Dakota are governed by NDCC 6-09-07, 15-10-12, and 21-04-02, indicating
that all public funds must be deposited in the Bank of North Dakota unless there are other constitutional or statutory
provisions. If there are no statutory provisions and the funds are invested outside the Bank of North Dakota, the state
agency must have the permission of the North Dakota Industrial Commission.
Investments are generally managed by the State Investment Board, the North Dakota Department of Trust Lands, the
Bank of North Dakota, and the North Dakota State Treasurer’s Office. Management responsibilities and investment
instruments as authorized by statute are as follows:
1. State Investment Board (SIB) – NDCC 21-10 designates the SIB with investment responsibilities for the Public
Employees’ Retirement System, Bonding Fund, Teachers’ Fund for Retirement, Fire and Tornado Fund, Workforce
Safety & Insurance Fund, and other specific funds. The Century Code states the SIB shall apply the prudent
investor rule in investing funds under its supervision. The retirement funds belonging to the teachers’ fund for
retirement and the public employees’ retirement system must be invested exclusively for the benefit of their
members and in accordance with the respective funds’ investment goals and objectives.
The State Investment Board’s investment policy allows investment managers to use derivative securities to hedge
or replicate underlying exposures but not for speculation. All derivatives are considered investment derivative
investments. The SIB had four types of derivative securities at June 30, 2019: futures, options, swaps and currency
forwards.
2. North Dakota Department of Trust Lands – The Century Code states that the Department of Trust Lands shall apply
the prudent investor rule in investing its funds. The investment policies of the Board allow the use of derivative
securities to hedge or replicate underlying exposures but not for speculation. All derivatives are considered
investment derivative investments.
3. The Bank of North Dakota – NDCC 6-09 authorizes the Bank of North Dakota. The Bank is owned and operated by
the State of North Dakota under the supervision of the North Dakota Industrial Commission. The Bank may have
investments in anything that any bank lawfully may do, except what is restricted by NDCC 6-09.
4. The North Dakota State Treasurer’s Office – The North Dakota Constitution and various sections of the Century
Code authorize the State Treasurer to invest all State funds deposited with the State Treasury. However, the State
Treasurer must invest the public funds with the Bank of North Dakota unless there is statutory authority to do
otherwise. Generally, the State Treasurer pools deposits and invests in money market accounts and Bank of North
Dakota certificates of deposit.
5. University System – NDCC 15-55-05 and 15-55-06 govern the investment of proceeds of revenue bonds and
revenues pledged to bondholders. Such proceeds must be invested in the Bank of North Dakota, in a separate fund
in the State Treasury or in a duly authorized depository for the state funds that is a member of the federal deposit
insurance corporation. The University System may invest such funds in direct obligation of, or in obligations where
the United States of America guarantees the principal and interest, or obligations of the State of North Dakota or
any municipality as defined in NDCC Section 21-03-01.
Agency investments, of the primary government, under management of the State Investment Board are included below
with the Pension and Investment Trust funds.
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STATE OF NORTH DAKOTA
INTEREST RATE RISK
Interest rate risk is the risk that changes in interest rates of debt securities will adversely affect the fair value of an
investment. The price of a debt security typically moves in the opposite direction of the change in interest rates. The
State does not have a formal investment policy that limits investment maturities as a means of managing its exposure to
potential fair value losses arising from future changes in interest rates. However, North Dakota Housing Finance’s
respective bond resolutions permit only investments that will not adversely affect the rating quality of the outstanding
bonds. Also, the maturity date or the date on which such investment obligations may be redeemed shall coincide as
nearly as practicable with the date or dates on which moneys in the funds or accounts for which the investments were
made will be required. The Bank of North Dakota’s investment policy provides for a duration range of one to four years,
which will serve to decrease interest rate risk.
At June 30, 2019, the following tables show the debt securities of the primary government and major component units by
investment type and maturity (expressed in thousands).
Primary Government (includes Pension and Investment Trust Funds)
Total Fair Less Than More Than
Investment Type Value 1 Year 1 - 6 Years 6 - 10 Years 10 Years
Asset Backed Securities $ 446,612 $ 347 $ 71,850 $ 200,301 $ 174,114
Collateralized Bonds 2,716 - - 250 2,466
Commercial Mortgage-Backed 1,593,442 898 1,330,199 3,321 259,024
Commercial Paper 1,596 1,596 - - -
Corporate Bonds 2,125,640 50,551 1,295,853 461,676 317,560
Corporate Convertible Bonds 21,761 721 12,187 2,443 6,410
Government Agencies 1,113,361 2,764 904,890 20,234 185,473
Government Bonds 1,179,573 151,185 621,219 198,690 208,479
Government Issued CMB 101,527 16 6,696 34,673 60,142
Government Mortgage-Backed 792,718 12 7,010 21,930 763,766
Repurchase Agreements (20,003) (20,003) - - -
Index-Linked Government Bonds 621,740 12,957 156,146 299,495 153,142
Municipal/Provincial Bonds 69,316 600 46,630 5,942 16,144
Non-Government-Backed CMOs 113,409 29 6,677 9,251 97,452
Short Term Bills and Notes 41,996 41,996 - - -
Short Term Investments Funds 443,676 443,676 - - -
Pooled Investments 1,440,048 6,003 744,939 469,107 219,999
Total Debt Securities $ 10,089,128 $ 693,348 $ 5,204,296 $ 1,727,313 $ 2,464,171
Major Component Units
Total Fair Less Than More Than
Investment Type Value 1 Year 1 - 6 Years 6 - 10 Years 10 Years
Commercial Paper $ 16,294 $ 16,294 $ - $ - $ -
Corporate Notes 24,829 16,284 8,545 - -
Government Agencies 10,604 3,759 6,845 - -
Government Bonds 35,662 15,107 20,555 - -
Short Term Bills and Notes 11,092 11,092 - - -
Total Debt Securities $ 98,481 $ 62,536 $ 35,945 $ - $ -
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The fair values of inflation indexed bonds are reflected in the tables above, based on their stated maturity dates. The
principal balances of these bonds are adjusted every six months based on the inflation index for that period.
Some investments are more sensitive to interest rate changes than others. Variable and floating rate collateralized
mortgage obligations (CMO’s), asset-backed securities (ABS), interest-only and principal-only securities are examples of
investments whose fair values may be highly sensitive to interest rate changes.
Interest-only (IO) and principal-only (PO) strips are transactions which involve the separation of the interest and principal
components of a security. They are highly sensitive to prepayments by mortgagors, which may result from a decline in
interest rates. The State held IOs valued at $18.8 million and POs valued at $0.0 million. The State has no policy
regarding IO or PO strips.
CONCENTRATION OF CREDIT RISK
Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer.
The State does not have an investment policy that specifically addresses concentrations of credit risk in a single issuer,
however the Bank of North Dakota has established asset allocation ranges for investments as a percentage of their total
portfolio.
The Bank of North Dakota had the following concentrations at June 30, 2019 (expressed in thousands):
Amount Percent
Federal Agency
Federal Home Loan Bank $ 353,171 19.1%
Small Business Administration 269,264 14.5%
Farm Credit 267,650 14.4%
Freddie Mac 165,635 8.9%
Fannie Mae 79,707 4.3%
Mortgage-backed
Fannie Mae 344,003 18.6%
Freddie Mac 313,416 16.9%
Others less than 5% 60,960 3.3%
$ 1,853,806 100.0%
CREDIT RISK
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The State
maintains a highly diversified portfolio of debt securities encompassing a wide range of credit ratings. Although the State
has no overall policy regarding credit risk, each debt securities manager is given a specific set of guidelines to invest
within based on the mandate for which it was hired. The guidelines specify in which range of credit the manager may
invest. These ranges include investment grade and below investment grade categories. The Bank of North Dakota’s
investment policy provides minimum credit quality ratings for its investments and asset allocation ranges for investments
as a percentage of the total portfolio.
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STATE OF NORTH DAKOTA
As of June 30, 2019, the following tables present the debt securities of the primary government and major component
units and their respective ratings (expressed in thousands).
Primary Government (includes Pension and Investment Trust Funds) S&P Credit Rating*
Total Not
Fair Value AAA AA A BBB BB B CCC CC C D Rated
Asset
Backed
Securities $446,613 $279,687 $41,178 $17,393 $9,776 $4,941 $2,391 $7,297 $1,876 $ - $1,319 $80,755
Collater-
alized
Bonds 2,716 2,716 - - - - - - - - - -
Commercial
Mortgage-
Backed 1,450,171 1,392,549 7,294 1,824 4,246 5,529 2,848 306 - 387 257 34,931
Commercial
Paper 1,596 - - 1,596 - - - - - - - -
Corporate
Bonds 2,125,695 14,493 159,098 743,927 917,139 186,146 86,172 9,884 233 - 878 7,725
Corporate
Convertible
Bonds 21,761 - - 547 1,349 7,289 1,275 3,452 - - - 7,849
Government
Agencies 856,543 681,575 153,143 6,939 14,265 - - 621 - - - -
Government
Bonds 619,601 4,969 480,492 5,775 62,881 15,590 36,281 - - - - 13,613
Government
Mortgage
Backed 501,405 - 496,988 200 2,798 - 703 - - - - 716
Government
Issued CMB 45,306 - 45,306 - - - - - - - - -
Index
Linked
Government
Bonds 582,630 - 582,630 - - - - - - - - -
Municipal/
Provincial
Bonds 68,327 10,177 30,815 14,233 4,036 2,271 2,887 - - - - 3,908
Non-
Government
Backed
CMOs 113,410 27,925 12,069 11,629 3,249 1,567 2,128 3,747 1,395 - 207 49,494
Repurchase
Agreements (20,003) - (20,003) - - - - - - - - -
Short-Term
Investment
Funds 162,200 29 3,622 38,374 - - - - - - - 120,175
Pooled
Investments 1,790,942 308,955 308,294 619,775 109,788 42,433 34,479 - - - - 367,218
Total Credit
Risk Debt
Securities 8,768,913 $2,723,075 $2,300,926 $1,462,212 $1,129,527 $265,766 $169,164 $25,307 $3,504 $387 $2,661 $686,384
US Gov’t &
Agencies** 1,266,484
Mutual
Funds 53,850
Total Debt
Securities $10,089,247
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Major Component Units
Total
Fair Value AAA AA A BBB
Commercial Paper $ 16,294 $- $- $ 16,294 $-
Short Term Bills & Notes 11,092 - - 11,092 -
Government Agencies 10,604 - 10,604 - -
Corporate Notes 24,829 - 3,054 18,425 3,350
Total Credit Risk Debt Securities $ 62,819 $- $ 13,658 $ 45,811 $ 3,350
US Gov’t & Agencies 35,662
Total Debt Securities $ 98,481
*Ratings are determined in the following order: 1) S&P rating, 2) Moody’s rating, 3) Fitch rating, 4) Manager-determined
rating (internal rating) and 5) if no ratings are available using steps 1-4, then shown as not rated.
**US government agency securities explicitly guaranteed by the US government are categorized here. Credit ratings of
US government agency securities that are only implicitly guaranteed by the US government are categorized accordingly
in the main body of this table. Implicitly guaranteed agency securities included in the Asset Backed, Commercial
Mortgage Backed, Gov’t Issued Commercial & Gov’t Mortgage Backed, Gov’t Agencies, Gov’t Bonds, Index Linked Gov’t
Bonds and Short Term Bills and Notes categories are issued by FNMA, FHLB, FHLMC, FAMC and TVA.
FOREIGN CURRENCY RISK
Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or a
deposit. Although the State Investment Board does not have a formal investment policy governing foreign currency risk,
the board does manage its exposure to fair value loss by requiring their international securities investment managers to
maintain diversified portfolios to limit foreign currency and security risk. The Department of Trust Lands treats currency
exposure in two different ways, depending on the type of investment. For the Board’s international equity portfolio, the
currency exposure is not hedged, as currency exposure is one of the items that adds diversity to the overall portfolio. For
foreign bonds, the Board fully hedges the currency exposure, as the purpose of this portfolio is to generate more
consistent returns.
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STATE OF NORTH DAKOTA
At June 30, 2019, foreign currency risk exposure on investments managed by the Department of Trust Lands and State
Investment Board were as follows (expressed in thousands).
Primary Government (includes Pension and Investment Trust Funds)
Currency Short-Term Debt Equity Real Estate Total
Argentine peso $ 82 $ 1,011 $ - $ - $ 1,093
Australian dollar 20,277 (843) 126,934 - 146,368
Brazilian real 214 8,641 20,718 - 29,573
British pound sterling 7,752 17,256 341,167 - 366,175
Canadian dollar 3,374 81 120,160 - 123,615
Chilean peso 53 11,352 1,221 - 12,626
Chinese yuan renminbi (3) - 20,306 - 20,303
Columbian peso 195 8,677 443 - 9,315
Czech koruna - 3,485 1,154 - 4,639
Danish krone 108 - 49,607 - 49,715
Egyptian pound - - 59 - 59
Euro (12,041) 23,143 662,270 5,815 679,187
Hong Kong dollar 792 - 179,766 - 180,558
Hungarian forint 172 520 4,217 - 4,909
Indian rupee - - 18,332 - 18,332
Indonesian rupiah 56 8,131 6,124 - 14,311
Israeli shekel - - 3,125 - 3,125
Japanese yen 16,211 - 403,087 - 419,298
Kenyan shiling - - 1,283 - 1,283
Malaysian ringgit 210 11,720 2,925 - 14,855
Mexican peso 37 23,006 6,852 - 29,895
New Israeli shekel 118 - 2,219 - 2,337
New Taiwan dollar 25 - 4,570 - 4,595
New Zealand dollar (40) 7,022 1,960 - 8,942
Norwegian krone 621 17,144 18,640 - 36,405
Peruvian neuvo sol - - 138 - 138
Philippine peso - - 1,261 - 1,261
Polish zloty (50) 9,715 4,076 - 13,741
Russian ruble - 2,288 1,674 - 3,962
Singapore dollar 351 - 15,257 - 15,608
South African rand 323 457 19,327 - 20,107
South Korean won 177 6,934 33,448 - 40,559
Swedish krona 1,268 14,696 74,848 - 90,812
Swiss franc 960 - 168,230 - 169,190
Taiwan dollar - - 22,284 - 22,284
Thai baht 312 - 11,270 - 11,582
Turkish lira 89 - 2,327 - 2,416
UAE dirham - - 296 - 296
International commingled
funds (various currencies) - - 995,814 28,930 1,024,744
Total international investment
securities $ 41,643 $ 174,436 $ 3,347,389 $ 34,745 $ 3,598,213
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Derivative Securities – Derivatives are financial arrangements between two parties whose payments are based on, or
“derived” from, the performance of some agreed upon benchmark. The investment policies of the States’ clients allow the
use of derivative securities to hedge or replicate underlying exposures but not for speculation. All derivatives are
considered investment derivative instruments. The fair value of all derivative securities is reported in the Statement of Net
Position. At June 30, 2019, the State had four types of derivative securities: futures, options, swaps and currency
forwards.
Futures – Futures represent commitments to purchase (asset) or sell (liability) securities at a future date and at a
specific price. Futures contracts are traded on organized exchanges (exchange traded) thereby minimizing the States’
counterparty risk. The net change in the futures contracts’ value is settled daily in cash with the exchanges. Net gains or
losses resulting from the daily settlements are included in net change in fair value of investments in the Statement of
Changes in Fiduciary Net Position and totaled $17.0 million for the year ended June 30, 2019. At June 30, 2019, the
State investment portfolio had the notional futures shown below (expressed in thousands).
Futures Notional Value
Cash and cash equivalent derivative futures
Long $ 188,152
Short (657,304)
Equity derivative futures
Long 808,005
Short -
Fixed income derivative futures
Long 352,611
Short (141,400)
Total futures $ 550,064
Options – Options represent or give buyers the right, but not the obligation, to buy (call) or sell (put) an asset at a preset
price over a specified period. Options are traded on organized exchanges (exchange traded) thereby minimizing the
States’ counterparty credit risk. The option’s price is usually a small percentage of the underlying asset’s value. As a
seller of a financial option, the State, through its investment manager, receives a premium at the beginning of the
agreement and bears the risk of an unfavorable change in the price of the financial instrument underlying the option. As a
buyer of a financial option, the State, through its investment manager, pays a premium at the beginning of the agreement
and the counterparty bears the risk of an unfavorable change in the price of the financial instrument underlying the
option. Gains and losses on options are determined based on fair values and recorded with the net change in fair value
of investments in the Statement of Changes in Fiduciary Net Position and totaled $3.3 million. At June 30, 2019, the
State had the following option balances (expressed in thousands):
Options Fair Value
Cash & Other Options
Call $ (10)
Put 1
Fixed Income Options
Call (38)
Put (241)
Total options $ (288)
Swaps – A swap is a derivative in which counterparties exchange certain benefits of one party’s financial instrument for
those of the other party’s financial instrument. Specifically, the two counterparties agree to exchange one stream of cash
flows for another stream. The State, through its investment managers, has entered into various swap agreements in an
attempt to manage its exposure to interest rate, inflation, credit, currency risk and total return.
Gains and losses on swaps are determined based on fair values and are recorded with the net change in fair value of
investments in the Statement of Changes in Fiduciary Net Position and totaled $(18.6) million for the year ended June
30, 2019. The maximum loss that would be recognized at June 30, 2019, if all counterparties failed to perform as
contracted is $3.0 million. Swap fair values are determined by a third party pricing source. At June 30, 2019, the States’
investment portfolio had the swap fair value balances as shown below (expressed in thousands).
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STATE OF NORTH DAKOTA
Credit Default Swaps
Counterparty/Moody’s Rating Notional Amount Expiration Date Fair Value
Bank of America/Aa2 (2 contracts) $ (430) 2021 - 2025 $ (32)
Citibank/A1 (34 contracts) (2,535) 2019 - 2024 (172)
Credit Suisse First Boston/A1 (8 contracts) (43,200) 2022 - 2024 931
Deutsche Bank/A3 (2 contracts) 2,000 2059 (16)
Goldman Sachs/A3 (4 contracts) (1,900) 2020 - 2024 (28)
HSBC Bank/Aa3 (2 contracts) (1,550) 2019 2
JP Morgan Chase/Aa2 (2 contracts) (400) 2019 - 2024 1
Morgan Stanley/A3 (2 contracts) (245) 2024 2
Total credit default swaps $ (48,260) $ 688
Interest Rate Swaps
Expiration Date
Counterparty/Moody’s Rating Notional Amount Range Fair Value
Citigroup Global Markets/A1 (24 contracts) $ 84,455 2020 - 2049 $ (3,427)
Credit Suisse First Boston/A1 (39 contracts) 128,462 2019 - 2049 12
JP Morgan Chase/Aa2 (119 contracts) 447,530 2020 - 2048 (14,715)
Total Interest Rate Swaps $ 660,447 $ (18,130)
Total Return Swaps
Counterparty/Moody’s Rating Notional Amount Expiration Date Fair Value
Credit Suisse International/A1 (2 contracts) $ 4,800 2041 $ (23)
Total Return Swaps $ 4,800 $ (23)
Currency Forwards – Currency forwards represent forward exchange contracts that are entered into in order to manage
the exposure to changes in currency exchange rates on the currency denominated portfolio holdings. A forward
exchange contract is a commitment to purchase (positive) or sell (negative) a currency at a future date at a negotiated
forward rate. The gain or loss arising from the difference between the original contracts and the closing of such contracts
is included in the net change in fair value of investments in the Statement of Changes in Fiduciary Net Position and
totaled $91 thousand. At June 30, 2019, the States’ investment portfolio included the currency forwards balances shown
below (expressed in thousands).
Currency Cost Purchases Sales Fair Value
Argentine peso $ 15 $ 15 $ - $ 15
Australian dollar (1,472) - (1,472) (1,484)
Brazilian real (18) - (18) (30)
British pound sterling (8,241) 15,387 (23,628) (8,279)
Canadian dollar (8,460) 9,960 (18,420) (8,491)
Columbian peso 186 186 - 195
Euro (61,622) 37,046 (98,668) (62,411)
Great Britain pound sterling 475 475 - 475
Japanese yen (17,609) 13,100 (30,709) (18,046)
Mexican peso 6 2,818 (2,812) 38
South African rand (13) 1,608 (1,621) -
United States dollar 96,753 177,348 (80,595) 96,753
Total forwards subject to currency risk $ (1,265)
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STATE OF NORTH DAKOTA
Derivative Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the value
of an interest rate-based derivative investment. The State does not have a formal investment policy regarding such
derivative investments. At June 30, 2019, the tables below show the States’ derivative investments subject to interest
rate risk (expressed in thousands).
Total Greater
Notional 3 Months or 3 to 6 6 to 12 Than
Value Less Months Months 1-5 Years 5 Years
Futures-
interest rate
contracts $ (257,941) $ 162,528 $ (525,813) $ 105,344 $ - $ -
Total $ (257,941) $ 162,528 $ (525,813) $ 105,344 $ - $ -
Greater
Total Fair 3 Months or 3 to 6 6 to 12 Than
Value Less Months Months 1-5 Years 5 Years
Options on
futures $ (279) $ (279) $ - $ - $ - $ -
Swaps -
interest
rate contracts (18,130) - 5 293 (536) (17,892)
Swaps -
credit
contracts 688 (1) 2 5 776 (94)
Total $ (17,721) $ (280) $ 7 $ 298 $ 240 $ (17,986)
Mill and Elevator Derivative Financial Instruments – The fair value balances and notional amounts of derivative
instruments outstanding at June 30, 2019, and the changes in fair value of such derivative instruments for the year then
ended as reported in the State’s financial statements are $15,750, classified as derivative instrument (one contract
equals 5,000 bushels) and $15,750, classified as deferred inflow of resources – accumulated increase in fair value of
hedging derivatives. The fair value of the grain futures contracts was determined on the Minneapolis Grain Exchange.
The margin requirement is $0.60 per bushel, unless the market price changes the limit for two consecutive days, then the
margin requirement is $0.90 per bushel. The Mill has entered into futures contracts for spring wheat to lock in a price for
a future delivery or settlement period. These contracts are entered into to protect the Mill against price fluctuation of the
commodity. The price protection is needed to cover any long or short positions compared to flour sales. The table below
shows the cost and market values of these spring wheat futures as of June 30, 2019.
Number of Average
Month Contracts Cost Fair Value Average Cost Market Value
Sept 2019 -5 $ 5.5288 $ 5.5425 $ (142,062) $ (138,562)
Dec 2019 286 5.7122 5.6750 8,186,301 8,115,250
Mar 2020 133 5.7949 5.8100 3,850,638 3,863,650
May 2020 73 5.6847 5.8875 2,076,900 2,148,938
July 2020 10 6.0000 5.9650 300,000 298,250
$ 14,271,777 $ 14,287,526
The Mill is exposed to credit risk on hedging derivative instruments that are in asset positions. All grain futures trades are
completed using two different national brokerage firms on the Minneapolis Grain Exchange. ADM Investor Services is
rate A by the Standard & Poor’s Rating Service. RJ O’Brien is a privately held business and is not rated by the Standard
& Poor’s Rating Service.
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The Mill is exposed to rollover risk on grain futures trades whenever the hedge ration (defined in aggregate of the size
across all futures months relative to the underlying net cash position) does not equal 1.0. At June 30, 2019, the table
below shows the hedge ratio by futures month going forward:
Period Hedge Ratio
Sept 2019 1.0
Dec 2019 1.0
Mar 2020 1.0
May 2020 1.1
July 2020 1.0
Net Position 1.0
C. SECURITIES LENDING
The following represents the balances relating to the securities lending transactions at June 30, 2019 (expressed in
thousands).
Primary Government (includes Pension and Investment Trust Funds)
Underlying Non-Cash Cash Collateral
Securities Lent Securities Collateral Value Investment Value
Lent for cash collateral:
US agency securities $ 13,215 $ - $ 13,513
US government securities 139,981 440,015 142,683
US corporate fixed income securities 69,821 174 71,305
US equities 54,224 4,847 55,105
Global government fixed income securities 1,565 - 1,667
Global agency securities 4,267 47 4,482
Global government securities 100 - 107
Global equities 1,934 - 2,025
Lent for non-cash collateral:
US agency securities 200 202 -
US government securities 449,143 17,968 -
US corporate fixed income securities 65,151 65,750 -
US equities 215,850 213,840 -
Global agency securities 44 - -
Global equities 17,900 18,960 -
Total $ 1,033,395 $ 761,803 $ 290,887
D. ENDOWMENT FUNDS
UNIVERSITY SYSTEMS
The endowment funds reported herein are institutional funds under the terms of the gift instrument and are not wholly
expendable by the institution. NDCC Section 59-21, the Uniform Prudent Management of Institutional Funds Act
(UPMIFA) applies to the investment of endowments governed by a gift instrument. NDUS SBHE policy 810 stipulates
endowment funds shall be invested according to the intent of the donor provided such intent is consistent with applicable
laws. Absent terms expressing donor intent in a gift instrument, NDUS institution officers initially shall deposit the funds in
institution accounts at the Bank of North Dakota. Thereafter, the funds may be invested according to NDCC 59-21.
Subject to the intent of the donor, NDUS institution officers are delegated authority to manage and invest these
institutional funds as provided by UPMIFA. NDCC Section 59-21-02.5a(7) applies to standard of conduct in the
administration of powers to make and retain investments. It states that in managing and investing an institutional fund,
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STATE OF NORTH DAKOTA
the needs of the institution and the fund to make distributions and to preserve capital must be considered. Given the
flexibility in NDCC 59-21-02, institutions have differing policies with respect to spending investment income and net
appreciation on endowment funds. For UND, distributions for spending endowments each year will be calculated once
annually with the quarter ended December 31 unitized market value and is based on the set spending rate, currently four
percent, applied to the average market value for the preceding twelve quarter average. All endowment in existence at
December 31 for one year will receive a distribution spending allocation. The available amount will be forecast to UND for
planning purposes by February 1, and these distributions will be available for spending in the upcoming fiscal year.
NDSU determines the spending of endowment earnings based on an annual evaluation. WSC give departments authority
to spend all investment income earned on the endowment funds. Net appreciation on investments are available for
expenditure and consist of the following at June 30, 2019:
Reflected in net position as:
North Dakota State University $ 233,027 Expendable scholarships & fellowships
University of North Dakota 937,935 Non-expendable scholarships & fellowships
Williston State College 2,731 Non-expendable scholarships & fellowships
Total NDUS $ 1,173,693
Endowment funds reported herein do not include the Federal Land Grant Fund held by the State Department of Trust
Lands. The annual proceeds from assets held by the Commissioner of the State Department of Trust Lands and are
deposited into each college/university’s operating fund at the State Treasury and are used for current operating
purposes. Bismarck State College, Lake Region State College and Williston State College do not participate in the
proceeds allocated by the State Land Department. Total assets held by the State Land Department and proceeds for the
fiscal year ended June 30, 2019 are approximately $185.2 million and $6.1 million respectively.
NORTH DAKOTA STATE FAIR FOUNDATION
The North Dakota State Fair Association Foundation had the following activity in their endowment as of September 30,
2018.
Beginning endowment $ 2,149,492
Endowment contributions 6,000
Ending endowment $ 2,155,492
E. RECEIVABLES
Receivables at June 30, 2019, consist of the following (expressed in thousands):
Other
Governmental Bank of North Housing
General Federal State Funds Dakota Finance
Receivables:
Accounts $ 29,814 $ 47,981 $ 144,909 $ - $ - $ 807
Less Allowance (10,331) (19,853) (44,703) - - -
Taxes 591,338 - 146,756 113 - -
Less Allowance (126,071) - (2,567) - - -
Interest 28,252 - 24,162 167 56,074 4,596
Less Allowance - - (7,716) - - -
Intergovernmental 15 206,781 15,141 - - 530
Less Allowance - - - - - -
Current Loans and Notes - - 13,972 52,976 698,557 27,954
Less Allowance - - (594) - - -
Noncurrent Loans and Notes 13 159 121,534 - 3,765,967 1,170,418
Less Allowance - - - - (92,750) -
Net Receivables $ 513,030 $ 235,068 $ 410,894 $ 53,256 $ 4,427,848 $ 1,204,305
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Workforce Other Major
University Safety & Enterprise Internal Component
System Insurance Funds Service Funds Units Total
Receivables:
Accounts $ 29,960 $ 34,567 $ 98,380 $ 386 $ 239 $ 387,043
Less Allowance (6,868) (8,000) (24,766) - (6) (114,527)
Taxes - - - - - 738,207
Less Allowance - - - - - (128,638)
Interest - 10,667 3,220 55 6,014 133,207
Less Allowance - - - - - (7,716)
Intergovernmental 26,643 - 906 374 - 250,390
Less Allowance - - - - - -
Current Loans and Notes 6,999 - 22,847 - 6,838 830,143
Less Allowance (818) - - - - (1,412)
Noncurrent Loans and Notes 24,884 - 359,945 - 13,356 5,456,276
Less Allowance (3,810) - (7,606) - (9,336) (113,502)
Net Receivables $ 76,990 $ 37,234 $ 452,926 $ 815 $ 17,105 $ 7,429,471
F. REVERSE REPURCHASE AGREEMENTS
State statutes permit the State to enter into reverse repurchase agreements, that is, the sale of securities with a
simultaneous agreement to repurchase them in the future at the same price plus a contract rate of interest. The fair value
of the securities underlying reverse repurchase agreements normally exceeds the cash received, providing the dealers a
margin against a decline in fair value of the securities. All sales of investments under these agreements are for fixed
terms. In investing the proceeds of these agreements, State policy is for the term to maturity of the investment to be the
same as the term of the agreement. Such matching existed at year end. These agreements are secured by Fed book-
entry securities held in the State’s name. At June 30, 2019, the State had no reverse repurchase agreements
outstanding and did not participate in reverse repurchase agreements during the fiscal year.
G. INTERFUND ACCOUNTS AND TRANSFERS
DUE FROM OTHER FUNDS/DUE TO OTHER FUNDS
Interfund balances at June 30, 2019, consist of the following (expressed in thousands):
Due To General Fund From:
Federal Fund $ 73,490
State Fund 28,357
Bank of North Dakota 821
Nonmajor Enterprise Funds 31,336
All Others 751
Total Due To General Fund $ 134,755
Included in the Nonmajor Enterprise Funds amount is a loan to the Rebuilder’s Loan Program for $15,153,282. This is
not expected to be repaid within one year.
Due To Federal Fund From: Due To State Fund From:
General Fund $ 7,032 General Fund $ 5,140
State Fund 26,129 Federal Fund 11,184
All Others 17 Internal Service Funds 191
Total Due To Federal Fund $ 33,178 Nonmajor Enterprise Funds 531
All Others 236
Total Due To State Fund $ 17,282
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Due To Internal Service Funds From: Due To Bank of North Dakota From:
General Fund $ 3,992 State Fund $ 52,081
State Fund 2,541 Nonmajor Enterprise Funds 62,969
University System 1,186 University System 2,229
All Others 1,226 All Others 80
$ 8,945 Total Due To Bank of North Dakota $ 117,359
Included in the Nonmajor Enterprise Funds amount is a loan to the Rebuilder’s Loan Program for $10,288,000, of which
$8,410,000 is not expected to be repaid within one year.
Due To University System From:
General Fund $ 12,192
Federal Fund 2,493
State Fund 3,122
Nonmajor Enterprise Funds 756
All Others 88
Total Due To University System $ 18,651
Due To All Other Funds From:
All Other $ 1,095
Included in this category are all other enterprise funds and fiduciary funds.
These balances are a result of a time lag between the dates that (1) services are provided and goods received or
reimbursable expenditures occur, (2) the payments are made, (3) the transactions are entered into the accounting
system, and (4) because of transactions occurring between funds with a fiscal year other than June 30, 2019.
A reconciliation of Due From’s and Due To’s is presented below (expressed in thousands):
Due From’s $ 331,265
General Fund/Bank of ND 634
Bank of ND/ Mill and Elevator (7,812)
Bank of ND/Rebuilder’s Loan (952)
Bank of ND/University System (756)
Bank of ND/Guaranteed Student Loan (171)
Governmental Agencies/Bank of ND (37,606)
Bank of ND/Enterprise Funds 57
Total Differences (46,606)
Due To’s $ 284,659
The previous table represents timing differences between agencies as a result of different fiscal year ends. Those
agencies with a different fiscal year end include: Bank of North Dakota and the following Nonmajor Enterprise Funds:
Guaranteed Student Loan, Beginning Farmer Revolving Loan and Community Water Facility Loan, all of which have a
December year end and State Fair, which has a September year end.
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INTERFUND TRANSFERS
A summary of interfund transfers for the fiscal year ended June 30, 2019, follows (expressed in thousands):
Special Special
Revenue Revenue Non-major Housing University Non-major
General Federal State Governmental Finance System Enterprise Total
Transfers Out
General $ - $ 1,399 $ 3,719 $ 2,172 $ - $ 383,016 $ 258 $ 390,564
Special Revenue -
Federal 253 - 38,288 281 - - - 38,822
Special Revenue
– State 130,260 18 - 1,253 168 13,114 200 145,013
Non-major
Governmental 953 - 1,104 - - - - 2,057
Bank of North
Dakota 70,000 - 12,403 - - - 42,750 125,153
Housing Finance - - 38 - - - - 38
University System - - 214 3,599 - - 96 3,909
Non-major
Enterprise 16,168 - 1,315 - - - - 17,483
Total $ 217,634 $ 1,417 $ 57,081 $ 7,305 $ 168 $ 396,130 $ 43,304 $ 723,039
(Transfers In do not agree to the statements due to the timing differences noted below.)
Transfers are used for the following purposes:
x Move general fund appropriation amounts to certain agencies.
x Move revenues from the fund that statute requires to collect them to the fund authorized to spend them.
x Move certain excess revenues collected in other funds to the general fund.
x Move receipts restricted for debt service from the funds collected to the debt service funds as payments become
due, and move capital project funds paying the construction costs.
For the year ended June 30, 2019, legislatively-mandated transfers were made to the general fund of $8,600,000 from
the State Lottery, $7,568,325 from Mill and Elevator, $4,824,460 from the Insurance Regulatory Trust Fund,
$124,000,000 from the Tax Relief fund, $124,000,000 from Strategic Investment and Improvement Fund, $70,000,000
from the Bank of North Dakota, $455,263,216 from the Legacy Fund and $1,249,063 from the multi-state tax audit fund.
A reconciliation of Transfers In and Transfers Out is presented below (expressed in thousands):
$ (709,339)
Differences:
Special Rev - Ag PACE / Bank of North Dakota 1,500
Special Rev - PACE / Bank of North Dakota (700)
PACE / Beginning Farmer Revolving Loan 1,500
Infrastructure Revolving Loan Fund / Bank of North Dakota (16,000)
Total Differences (13,700)
Transfers Out $ (723,039)
The above timing differences of $13,700,000 result from transactions between agencies that have different fiscal year
ends. Those agencies with a different fiscal year end include: Bank of North Dakota, and Nonmajor Enterprise Fund
Beginning Farmer Revolving Loan fund, both of which have a December year end. This difference is also the total net
transfers on the Government-wide Statement of Activities.
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H. CAPITAL ASSETS
The following is a summary of capital assets during the fiscal year (expressed in thousands):
Primary Government
Balance Balance
Description July 1, 2018* Increases Decreases June 30, 2019
Governmental Activities:
Capital Assets Not Being Depreciated
Land $ 159,143 $ 2,217 $ (310) $ 161,050
Construction in Progress 2,127,056 283,716 (757,371) 1,653,401
Total Capital Assets Not Being Depreciated 2,286,199 285,933 (757,681) 1,814,451
Capital Assets Being Depreciated:
Buildings and Improvements 703,603 27,214 (384) 730,433
Equipment 325,079 34,726 (21,985) 337,820
Intangibles
Software 253,801 114,933 (123) 368,611
Other 38,133 1,100 - 39,233
Infrastructure 4,980,686 652,354 (7,295) 5,625,745
Total Capital Assets Being Depreciated 6,301,302 830,327 (29,787) 7,101,842
Less Accumulated Depreciation for:
Buildings and Improvements (301,103) (17,905) 283 (318,725)
Equipment (166,594) (21,477) 18,281 (169,790)
Intangibles
Software (105,232) (18,949) 119 (124,062)
Other (28,108) (1,441) - (29,549)
Infrastructure (2,961,164) (83,185) 7,243 (3,037,106)
Total Accumulated Deprecation (3,562,201) (142,957) 25,926 (3,679,232)
Total Capital Assets Being Depreciated, Net 2,739,101 687,370 (3,861) 3,422,610
Governmental Activities Capital Assets, Net $ 5,025,300 $ 973,303 $ (761,542) $ 5,237,061
* Beginning capital asset balances were adjusted for certain reclassifications and prior period adjustment.
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Balance Balance
Description July 1, 2018 Increases Decreases June 30, 2019
Business-Type Activities:
Capital Assets Not Being Depreciated
Land $ 24,099 $ - $ - $ 24,099
Construction in Progress 58,112 131,190 (22,353) 166,949
Total Capital Assets Not Being Depreciated 82,211 131,190 (22,353) 191,048
Capital Assets Being Depreciated:
Buildings and Improvements 1,779,784 40,387 (2,633) 1,817,538
Equipment 531,930 27,930 (17,629) 542,231
Intangibles
Software 28,875 127 (79) 28,923
Other 21,870 2,219 (51) 24,038
Infrastructure 228,788 8,849 - 237,637
Total Capital Assets Being Depreciated 2,591,247 79,512 (20,392) 2,650,367
Less Accumulated Depreciation for:
Buildings and Improvements (637,590) (42,966) 2,178 (678,378)
Equipment (355,678) (30,175) 15,749 (370,104)
Intangibles
Software (25,832) (1,290) 181 (26,941)
Other (13,450) (2,201) 54 (15,597)
Infrastructure (112,896) (6,199) - (119,095)
Total Accumulated Deprecation (1,145,446) (82,831) 18,162 (1,210,115)
Total Capital Assets Being Depreciated, Net 1,445,801 (3,319) (2,230) 1,440,252
Business-Type Activities Capital Assets, Net $ 1,528,012 $ 127,871 $ (24,583) $ 1,631,300
Major Component Units
Balance Balance
Description July 1, 2018 Increases Decreases June 30, 2019
Capital Assets Not Being Depreciated
Land $ 7,352 $ - $ - $ 7,352
Construction in Progress - 4,928 - 4,928
Total Capital Assets Not Being Depreciated 7,352 4,928 - 12,280
Capital Assets Being Depreciated:
Buildings and Improvements 177,952 3,957 (12,678) 169,231
Equipment 47,548 6,551 (1,533) 52,566
Intangibles 78 - - 78
Infrastructure 1,209 - - 1,209
Total Capital Assets Being Depreciated 226,787 10,508 (14,211) 223,084
Less Accumulated Depreciation for:
Buildings and Improvements (71,810) (5,207) 5,088 (71,929)
Equipment (21,233) (3,691) 1,486 (23,438)
Intangibles (78) - - (78)
Infrastructure (574) (48) - (622)
Total Accumulated Deprecation (93,695) (8,946) 6,574 (96,067)
Total Capital Assets Being Depreciated, Net 133,092 1,562 (7,637) 127,017
Major Component Unit Capital Assets, Net $ 140,444 $ 6,490 $ (7,637) $ 139,297
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Depreciation expense was charged to functions/programs of the primary government as follows (expressed in
thousands):
Governmental Activities:
General Government $ 9,562
Education 690
Health and Human Services 16,452
Regulatory 640
Public Safety and Corrections 13,545
Agriculture and Commerce 135
Natural Resources 16,993
Transportation 84,940
Total Governmental Activities Depreciation Expense $ 142,957
Construction In Progress is composed of the following (expressed in thousands):
Project Description:
Amount Expended
Governmental Activities Amount Authorized Through June 30, 2019 Balance Authorized
Attorney General $ 1,822 $ 697 $ 1,125
Office of Management and Budget 400 63 337
Secretary of State 2,197 1,350 847
Department of Health 979 498 481
Department of Human Services 4,189 2,292 1,897
Industrial Commission 5,650 247 5,403
Financial Institutions 436 395 41
Adjutant General 47,920 18,381 29,539
Game and Fish 931 38 893
Department of Transportation 1,872,362 1,627,409 244,953
Parks & Recreation 4,088 2,013 2,075
ND School for the Deaf 133 18 115
Total Governmental Activities $ 1,941,107 $ 1,653,401 $ 287,706
Amount Expended
Business-Type Activities Amount Authorized Through June 30, 2019 Balance Authorized
Mill and Elevator $ 28,775 $ 23,671 $ 5,104
University System* 327,535 145,358 182,177
Workforce Safety and Insurance 29,534 9,678 19,856
Total Business-Type Activities $ 385,844 $ 178,707 $ 207,137
*Interest expense related to capital asset debt was approximately $15.4 million in fiscal year 2019, of which
approximately $4.0 million was capitalized and included in construction in progress.
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I. OPERATING LEASES
PAYMENTS ON OPERATING LEASES
The State is obligated under certain leases accounted for as operating leases. Operating leases do not give rise to
property rights or lease obligations, and therefore, the resulting expenditures are recognized as incurred. Lease
expenditures for the year ended June 30, 2019, amounted to $20.9 million for governmental activities and $17.1 million
for business-type activities.
Future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease
terms in excess of one year as of June 30, 2019, for all fund types are as follows (expressed in thousands):
Year Ending Governmental Business-type
June 30 Activities Activities
2020 $ 11,496 $ 11,633
2021 8,907 9,410
2022 4,709 5,985
2023 4,065 3,880
2024 2,773 1,561
2025-2029 4,876 1,503
2030-2034 749 473
2035-2039 - 47
Total Minimum Lease Payments $ 37,575 $ 34,492
J. CAPITAL LEASES
The State is obligated under certain leases accounted for as capital leases. In the government-wide and proprietary fund
statements, capital assets and a corresponding liability are recorded at the inception of the lease. The liability is reduced
by payments of principal, with a portion of the payment allocated to interest expense. For capital leases in governmental
funds, other financing sources and expenditures are recorded at lease inception. Lease payments are recorded as debt
service expenditures.
The schedule below lists the future minimum lease payments under these capital leases and the present value of the net
minimum lease payments at June 30, 2019 (expressed in thousands):
Business- Major
Governmental type Component
Year Ending June 30 Activities Activities Units
2020 $ 527 $ 7,123 $ 128
2021 457 6,577 128
2022 136 6,279 128
2023 70 5,948 127
2024 16 5,544 127
2025-2029 - 16,422 638
2030-2034 - 12,111 574
2035-2039 - 5,143 -
2040-2044 - 3,239 -
2045-2049 - 2,594 -
2050-2054 - 825 -
Total Minimum Lease Payments 1,206 71,805 1,850
Less: Amount Representing Interest (87) (17,445) (533)
Present Value of Future Minimum
Lease Payments $ 1,119 $ 54,360 $ 1,317
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The historical costs of assets acquired under capital leases, and included as capital assets on the government-wide
Statement of Net Position at June 30, 2019, is as follows (expressed in thousands):
Business- Major
Governmental Type Component
Activities Activities Units
Infrastructure $ - $ 60 $ -
Buildings - 52,430 1,979
Intangibles - 156 -
Equipment 2,381 16,204 -
Less: Accumulated Depreciation (1,755) (18,247) (1,027)
Total $ 626 $ 50,603 $ 952
K. DEFERRED OUTFLOWS OF RESOURCES
FINANCIAL DERIVATIVE INSTRUMENT
The State enters into interest rate swap agreements to modify interest rates on certain liabilities. The fair values of both
hedging derivatives and investment derivatives (if any) are presented on the Statement of Net Position, either as a
derivative liability (negative fair value) or as a derivative asset (positive fair value). The change in the total fair value of
derivatives that are determined to be effective hedges is recorded as a deferred inflow or outflow of resources on the
Statement of Net Position. If a derivative were determined to be an ineffective hedge, it would be classified as an
investment derivative, and the change in the total fair value would be presented as part of investment earnings.
DEFERRED LOSS ON BOND REFUNDING
A deferred charge on refunded debts results from the difference in the carrying value of the refunded debt and its
reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.
L. LONG-TERM DEBT
Debt authorized is generally limited by the state constitution. The Constitution of North Dakota provides that the State
may issue or guarantee the payment of bonds, provided that all bonds in excess of $2 million are: (1) secured by first
mortgage upon property and no further indebtedness may be incurred by the State unless evidenced by a bond issue; (2)
authorized by law; (3) for a certain purpose; (4) provisioned to pay the interest semiannually; and (5) the principal is paid
within 30 years. Additionally, the law authorizing the bond issue must specifically appropriate the provisions to the
payment of the principal and interest of the bond.
1. REVENUE BONDS
Bonds payable at June 30, 2019, consisted of bonds issued by the State and are accounted for by the respective state
agencies in the government-wide financial statements that issued the bonds.
Current state statutes empower certain state agencies to issue bonds as part of their activities. This debt is not backed
by the full faith and credit of the State of North Dakota. The principal and interest on such bonds shall be payable only
from the applicable agency’s program income.
Primary Government
Building Authority
The 2010 Series A and B, the 2012 Series A and the 2017 Series A bonds have interest payable semiannually on June 1
and December 1 of each year. The 2010 Series A bonds are subject to optional redemption in whole or in part. The 2010
Series B, the 2012 Series A and the 2017 Series A bonds are not subject to optional and/or extraordinary optional
redemption prior to maturity upon the occurrence of certain events. The bonds are independently secured by the funds,
certain mortgaged property, and all rights, titles, and interests of the Building Authority as lessor, including all basic rent
payments, investment earnings on the funds and any other income derived by the Building Authority with respect to the
lease. Total net revenue pledges for fiscal year 2019 were $6.3 million. For fiscal year 2019, principal and interest paid
by the Authority on the bonds was $6.3 million. The total principal and interest remaining to be paid as of June 30, 2019,
is $30.8 million payable through December 2030.
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The 2010 bond agreements require the establishment and maintenance of reserve funds to be used for debt service
payments if amounts in the bond funds are insufficient to make payments. Fund are also required for any positive
arbitration due to the Federal government.
Department of Transportation
The North Dakota Department of Transportation (NDDOT) is authorized pursuant to NDCC 24-02-40.1, to issue grant
and revenue anticipation bonds for the purpose of financing certain qualified federal aid transportation projects. The
Series 2005 Bonds are limited obligations of NDDOT, payable solely from the Trust Estate, consisting primarily of federal
transportation funds and pledged state highway funds. The Series 2005 Bonds will not be deemed or construed as
creating an indebtedness of the State within the meaning of the State Constitution or laws of the State concerning or
limiting the creation of indebtedness of the State. The total principal and interest remaining to be paid on the bonds is
$5.3 million payable through June 2020. For the current year principal and interest paid and total net pledged revenues
before interest expense were $5.3 million and $5.3 million, respectively. The funds pledged for the NDDOT 2005 bond
issue consist of state funds in the State Highway Fund from the following sources: Highway Tax Distribution Fund, fee
and permit revenues, interest revenue and miscellaneous sales of scrap materials and obsolete equipment. The pledged
funds do not include any funding deposited into the State Highway Fund from the State General Fund. The proportion of
the specific revenue stream pledged was 98.5% in 2019.
Interest on the Series 2005 Bonds is payable on June 1 and December 1, of each year. Bonds maturing on or after June
1, 2016, are subject to redemption prior to maturity at the option of NDDOT, at a redemption price equal to 100% of the
principal amount plus accrued interest.
Student Loan Trust
Interest is payable semiannually on June 1 and December 1 of each year. The 2004 Series A Bonds are variable rate
bonds. The rate of interest is determined based on one-month LIBOR plus 0.7% . The maximum rate of interest is 12%
per annum. Details of the terms and provisions of the variable rate bonds are outlined in Section 2.1 of the Fourth
Supplemental Resolution to the State of North Dakota Student Loan Revenue Bonds First General Bond Resolution.
Section 2.2 of the Fourth Supplemental Resolution to the State of North Dakota Student Loan Revenue Bonds First
General Bond Resolution has deemed these to be Federally Taxable Bonds. The Series 2004 Bonds are subject to
redemption prior to maturity at the option of the Commission from any source of funds, in whole or in part, on any date at
a redemption price equal to 100% of the principal amount plus accrued interest to date of redemption.
The total principal and interest remaining to be paid on the outstanding bond is $1 million payable through June 2029.
For fiscal year 2019, revenue pledged and total principal and interest paid by Student Loan Trust were $46,000 and
$30,000, respectively
Housing Finance
Housing Finance Bonds were issued to provide financing to purchase mortgage loans to finance multifamily housing
projects. The bonds are the direct obligation of the Housing Finance Agency and are secured by the mortgage loans
purchased under the applicable resolutions; the revenues, prepayments, insurance and foreclosure proceeds received
related to the mortgage loans; and certain funds and accounts established pursuant to the applicable bond resolution.
Revenues Pledged – The agency has homeownership bonds outstanding in the amount of $1.25 billion maturing at
various times from July 1, 2019 through January 1, 2050. The bonds have been issued to provide financing to purchase
mortgage loans. Annual principal and interest payments on the bonds are expected to require 98 percent of net
revenues. Principal and interest paid for the current year and total customer net revenues were $104.1 million and $23.5
million, respectively. Bond principal was reduced through customer revenues and the refunding of older bonds with
proceeds from new bond issues.
Pursuant to the Series Resolutions adopted to date and under the 1994 and 2009 General Resolutions, the revenues
generated by the Program Loans (but not the Program Loans themselves) are pledged to secure the Bonds. The Agency
is permitted by terms of the General Resolutions to issue Bonds and pledge Revenues pursuant to the Series Resolution
which exceed the amount required to meet the obligations of that Series of Bonds. In such event, it is likely that any such
Series of bonds would produce excess Revenues which could be available to redeem the related Series of bonds or any
other Series of Bonds prior to the state maturities thereof.
The Agency also had multifamily revenue bonds in the amount of $9.25 million that mature on August 1, 2020. The
bonds have been issued to pay a portion of the cost of acquiring, rehabilitation and equipping a 186 unit multifamily
residential rental property located in Fargo, North Dakota. The bonds will be payable solely from the revenues and other
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money assigned to secure that payment, which include payments required by the loan agreement. Such payment shall
cover the entire principal and interest payment for the bond.
University System
Revenue bonds are limited obligations of the University System. The principal and interest on the bonds are payable
generally from the net income of specific auxiliary activities, designated student fees, interest subsidies and debt service
reserve funds. These revenues are generally pledged to the payment of bonds in accordance with the specific terms of
the specific indenture. Net pledged revenues for fiscal year 2019 were $19.4 million. Principal and interest paid for the
current fiscal year were $19.4 million, with total remaining principal and interest of $357.88 million payable through fiscal
year 2044.
State Fair Association
Capital Financing Program Bonds Series 2015 – Interest is payable semi-annually on June 1 and December 1 of each
year. The bonds maturing on June 1, 2029 are not subject to optional redemption prior to maturity except under
extraordinary circumstances. The bonds are secured by the Association’s net revenues and by the lodging tax proceeds
from the City of Minot, North Dakota.
Major Component Units
Public Finance Authority
The bonds of the Public Finance Authority were issued to provide financing to purchase municipal securities in order to
provide local political subdivisions with funds to finance local projects. The bonds are direct obligations of the Public
Finance Authority and are secured by municipal securities purchased under the applicable resolutions, interest earnings
and certain accounts established pursuant to the applicable bond resolutions. Net pledged revenues for fiscal year 2019
were $24.7 million. Principal and interest paid for the current fiscal year were $44.4 million, with total remaining principal
and interest of $734.0 million payable through June 2045.
Revenue Bonds outstanding (expressed in thousands):
Primary Government
Interest Balance
Maturities Rates 6/30/19
Governmental-Type Activities:
Building Authority 2020-2031 1.50-6.25 $ 24,858
Department of Transportation 2020 3.00-5.00 5,092
Business-Type Activities:
1)
Student Loan Trust 6/1/2029 3.10 1,000
Housing Finance:
1)
Homeownership 2020-2050 0.20-5.25 1,253,146
Multifamily Revenue 2021 2.125 9,250
University System:
BSC—Bismarck 2020-2033 2.00-4.00 7,768
MaSU—Mayville 2020-2030 1.25-6.63 3,426
MiSU–Minot 2020-2041 2.00-6.60 11,581
NDSCS—Wahpeton 2020-2037 3.76 7,335
2)
NDSU—Fargo 2020-2047 1.50-5.00 132,725
UND—Grand Forks 2020-2044 0.75-4.25 84,512
VCSU—Valley City 2020-2040 2.80-7.05 5,185
Williston State College 2020-2041 6.81 7,660
State Fair Association 2020-2029 3.00 1,697
Total Revenue Bonds Payable—
Primary Government $ 1,555,235
1)
Entire amount of bonds payable are not associated with capital assets of the State.
2)
At June 30, 2019, NDSU had pledged $14.7 million of assets as collateral for bonds payable issued at the
Research I and Research II buildings.
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Major Component Units
Interest Balance
Maturities Rates 6/30/19
Public Finance Authority 2020-2045 0.24-8.25 $ 549,900
University System Foundation 2020-2040 0.75-5.25 46,230
Total Revenue Bonds Payable—
Major Component Units $ 596,130
Debt service requirements to maturity on revenue bond issues for the fiscal years ending June 30 are summarized below
(expressed in thousands):
Primary Government
Governmental Activities Business-type Activities
Principal Interest Principal Interest
2020 $ 9,460 $ 1,133 2020 $ 46,768 $45,728
2021 4,620 678 2021 65,636 47,744
2022 4,550 475 2022 55,387 46,103
2023 3,180 298 2023 55,900 44,661
2024 2,870 148 2024 55,359 43,143
2025-2029 1,899 255 2025-2029 266,900 192,383
2030-2034 1,433 24 2030-2034 266,345 150,435
2035-2039 - 2035-2039 258,873 105,879
2040-2044 - 2040-2044 234,198 62,278
2045-2049 - 2045-2049 189,571 20,119
2050-2054 - 2050-2054 8,070 195
Bond Premium 1,938 (1,938) Bond Premium 22,278 (22,278)
Total $ 29,950 $ 1,073 $1,525,285 $ 736,390
Major Component Units
Principal Interest
2020 $ 28,020 $24,007
2021 28,842 23,564
2022 29,648 22,323
2023 31,645 21,010
2024 29,549 19,686
2025-2029 144,517 75,168
2030-2034 150,958 43,501
2035-2039 84,094 14,130
2040-2044 12,304 2,451
2045-2049 4,358 219
Bond Premium 52,195 (52,195)
Total $596,130 $193,864
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STATE OF NORTH DAKOTA
2. NOTES PAYABLE
The following is a schedule of notes payable outstanding at June 30, 2019 (expressed in thousands):
Primary Government
Interest Balance
Maturities Rates 6/30/19
Governmental Activities:
Office of Management and Budget 2020-2022 2.43-2.65 $ 12,246
Department of Human Services 2020 3.44-5.55 9,651
Proprietary Activities:
1)
Bank of North Dakota 2020-2029 1.61-5.56 1,103,375
University System 2020-2035 1.75-5.15 17,412
Total Revenue Bonds Payable—
Primary Government $ 1,142,684
Major Component Units
Interest Balance
Maturities Rates 6/30/19
University System Foundation 2020-2036 2.43-4.35 $ 9,995
State Fair Foundation 2020-2022 4.22 79
Total Revenue Bonds Payable—
Major Component Units $ 10,074
1)
These notes payable represent FHLB long-term advances. The advances must be secured by minimum
qualifying collateral maintenance levels. Residential, student, agriculture and commercial loans with carrying
values of $1.47 billion are currently being used as security to meet these minimum levels.
Short Term Borrowings:
The Bank of North Dakota issued short-term debt to fund loans on a short-term basis.
The ND Housing Finance Agency maintains a collateral pledge agreement with the FHLB covering secured advances
whereby the Agency has agreed to retain residential real estate loans and marketable securities, free of all other
pledges, liens and encumbrances. The pledged loans and securities are discounted by FHLB when determining their
borrowing capacity. The aggregate borrowing capacity of eligible collateral was approximately $85,066 as of June 30,
2019. In addition, borrowings are collateralized by $30,673 of loans receivable and $136 of cash and investments. The
Agency borrowed and paid back $37.3 million during the year ended June 30, 2019.
Debt service requirements to maturity for notes payable for the fiscal years ending June 30 are summarized below
(expressed in thousands):
Primary Government
Governmental Activities Business-type Activities
Principal Interest Principal Interest
2020 $ 10,363 $ 589 2020 $ 725,584 $ 14,142
2021 730 279 2021 28,899 12,052
2022 748 261 2022 102,206 10,517
2023 766 243 2023 62,489 7,318
2024 786 224 2024 116,942 5,217
2025-2029 4,229 817 2025-2029 77,940 5,179
2030-2034 4,275 268 2030-2034 6,560 180
2035-2039 - - 2035-2039 167 3
Total $ 21,897 $ 2,681 $1,120,787 $ 54,608
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STATE OF NORTH DAKOTA
Major Component Units
Principal Interest
2020 $4 $ 447
2021 822 516
2022 178 496
2023 624 473
2024 8,096 238
2025-2029 20 15
2030-2034 117 60
2035-2039 145 31
2040-2044 68 3
Total $ 10,074 $ 2,279
3. CERTIFICATES OF PARTICIPATION
Primary Government
University System
On September 1, 2018, the University of North Dakota (UND) entered into a lease-purchase agreement with Johnson
Controls PI Project Site Operations, LLC (Johnson Controls) to construct and operate a new steam plant and make other
energy conservation improvements. To fund the project, UND issued Series 2018A and 2018B Certificates of
Participation through Trust Agreement with the Bank of North Dakota, as the Trustee. The certificates have interest rates
ranging from 3.55 to 5.0 percent and are subject to annual appropriations by the North Dakota Legislature as part of the
general operating appropriations.
The Series 2018A certificates were issued at a par value of $76.6 million, with a net premium of $3.8 million. Beginning in
fiscal year 2019, UND will make semi-annual interest-only payments through fiscal year 2040. The semi-annual interest-
only payments in fiscal years 2019 and 2020 are for capitalized interest paid with bond proceeds. The first principal
payment will be due in fiscal year 2041. The certificates mature in fiscal year 2057.
The Series 2018B certificates were issued at a par value of $16.5 million, with no premium or original issue discount.
Beginning in fiscal year 2019, UND will make semi-annual interest-only payments through fiscal year 2023. The semi-
annual interest-only payments in fiscal years 2019 and 2020 are for capitalized interest paid with bond proceeds. The
first principal payment will be due in 2024. The certificates mature in fiscal year 2041.
The following is a schedule of certificates of participation outstanding at June 30, 2019 (expressed in thousands):
Primary Government
Maturities Interest Rates Balance 6/30/19
Proprietary Activities:
University System 2024-2057 3.55 – 5.00 $ 96,843
Debt service requirements to maturity on the certificates of participation for the fiscal years ending June 30 are
summarized below (expressed in thousands):
Primary Government
Business-type Activities
Principal Interest Principal Interest
2020 $- $ 4,240 2030-2034 $ 2,663 $ 20,654
2021 - 4,240 2035-2039 9,051 19,625
2022 - 4,240 2040-2044 11,796 17,135
2023 - 4,240 2049-2049 18,367 13,971
2024 105 4,240 2050-2054 31,780 8,638
2025-2029 1,811 21,069 2055-2059 21,270 1,877
Total $ 96,843 $ 124,169
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STATE OF NORTH DAKOTA
Changes in General Long-Term Liabilities
Changes in Long-Term Liabilities for the year ended June 30, 2019, are summarized as follows (expressed in
thousands):
Primary Government
Beginning Amounts
Balance Ending Due Within
Restated Additions Reductions* Balance One Year
Governmental Activities:
Notes Payable $ 22,247 $ - $ (350) $ 21,897 $ 10,364
Bonds Payable 40,429 - (10,479) 29,950 9,460
Capital Leases Payable 1,415 184 (480) 1,119 479
Compensated Absences 46,433 34,224 (34,401) 46,256 4,133
Claims/Judgments Payable 10,534 3,284 (4,716) 9,102 2,056
Net Pension Liability (Note 6) 643,513 15,466 - 658,979 -
Net OPEB Liability (Note 7) 32,064 - (804) 31,260 -
Total Long-Term Liabilities $ 796,635 $ 53,158 $ (51,230) $ 798,563 $ 26,492
Business-Type Activities*:
Notes Payable $ 1,289,686 $ 6,414,380 $ (6,583,279) $ 1,120,787 $ 725,584
Bonds Payable 1,242,368 389,023 (106,106) 1,525,285 52,332
Certificates of Participation - 96,843 - 96,843 -
Capital Leases Payable 40,058 22,390 (8,089) 54,359 4,806
Intergovernmental Payable 5,494 230 (445) 5,279 682
Compensated Absences 35,912 4,229 (4,622) 35,519 5,705
Dividends Payable 107,247 113,235 (107,247) 113,235 113,235
Claims/Judgments Payable 1,051,370 98,417 (58,021) 1,091,766 131,735
Net Pension Liability (Note 6) 219,348 9,165 - 228,513 -
Net OPEB Liability (Note 7) 10,303 - (156) 10,147 -
Total Long-Term Liabilities $ 4,001,786 $ 7,147,912 $ (6,867,965) $ 4,281,733 $ 1,034,079
Major Component Units*
Amounts
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Notes Payable $ 19,175 $ 1,612 $ (10,713) $ 10,074 $ 822
Bonds Payable 473,779 155,398 (33,047) 596,130 30,372
Capital Leases Payable 1,379 - (62) 1,317 65
Intergovernmental Payable 565 103 (44) 624 34
Compensated Absences 21 - (7) 14 14
Net Pension Liability (Note 6) 266 13 - 279 -
Total Long-Term Liabilities $ 495,185 $ 157,126 $ (43,873) $ 608,438 $ 31,307
* Bonds payable reductions include amortization of premium and discount. Payments of long term debt (notes payable,
bonds payable and capital leases payable) for governmental activities includes payments on capital leases payable for
internal service funds of $11,324 and amortization of bond premiums of $459.
**Included above are amounts classified as Due to Component Units in the Statement of Net Position for the University
System as follows, expressed in the thousands.
Business-Type Activities Major Component Units
Total Current Total Current
Notes Payable $ 160 $ 56 $ 9,995 $ 817
Bonds Payable 18,495 1,765 46,230 3,412
Capital Leases Payable 17,392 1,522 1,317 64
Intergovernmental Payable - - 621 32
Total $ 36,047 $ 3,343 $ 58,163 $ 4,325
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STATE OF NORTH DAKOTA
Internal service funds predominately serve the governmental funds. Accordingly, long-term liabilities for them are
included as part of the above totals for governmental activities. At year end, internal service funds included in the above
amounts consist of $18,287 of capital leases payable, $2,435,298 of compensated absences and $8,125,638 of claims
and judgments. Other governmental activities compensated absences generally have been liquidated by the General
Fund (66.4%), the Highway Fund (15.5%), the Federal Fund (7.5%), and other various funds. Other governmental
activities claims and judgments have all been liquidated by the Petroleum Release Compensation Fund.
M. ARBITRAGE REBATE PAYABLE
Arbitrage as it applies to government financing refers to the ability of state governments to obtain funds at a tax-exempt
rate of interest and to then invest those funds in investments which earn a higher yield, resulting in a profit to the issuer.
The arbitrage rebate rules require that any earnings from the investment of the tax-exempt bond proceeds which exceed
the yield on the bonds be remitted to the federal government.
The State has an arbitrage rebate payable to the federal government of approximately $93,000 at June 30, 2019. These
amounts are reported in the Government-wide and Proprietary Fund Type financial statements as an intergovernmental
payable.
N. DEFERRED INFLOWS OF RESOURCES
GRANTS RECEIVED PRIOR TO TIME REQUIREMENTS
This amount represents unavailable revenue. The amounts are deferred and recognized as an inflow of resources in the
period that the amounts become available
INCREASE IN FAIR VALUE OF HEDGING DERIVATIVES
This amount represents the changes in fair value of futures.
O. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value measurements are used to record fair value adjustments to certain assets, deferred outflows of resources,
liabilities and deferred inflows of resources to determine fair value disclosures.
FAIR VALUE HIERARCHY
In accordance with GASB Statement No. 72, assets, deferred outflows of resources, liabilities and deferred inflows of
resources are grouped at fair value in three levels, based on the markets in which the assets and liabilities are traded
and the reliability of the assumptions used to determine fair value. These levels are:
Level 1: Valuation is based upon quoted prices in active markets for identical assets or liabilities that the reporting
entity has the ability to access at the measurement date.
Level 2: Valuation is based upon quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, and model-based valuation techniques
for which all significant assumptions are observable in the market.
Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the
market. These unobservable assumptions reflect our own estimates of assumptions that market participants
would use in pricing the asset or liability. Valuation techniques include use of option pricing models,
discounted cash flow models and similar techniques.
Investments that are measured at fair value using the net asset value per share (or its equivalent) as practical expedient
are not classified in the fair value hierarchy.
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STATE OF NORTH DAKOTA
DETERMINATION OF FAIR VALUE
In accordance with GASB Statement No. 72, fair values are based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is the State’s
policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value
measurements, in accordance with the fair value hierarchy.
The following is a description of the methodologies used for instruments measured at fair value.
Securities classified in Level 1 are valued using quoted prices in active markets for those securities. Securities classified
in Level 2 and Level 3 are valued using methodologies such as various bid evaluations, market averages and other
matrix pricing techniques as well as values derived from associated traded securities or last trade data. In instances
where inputs used to measure fair value fall into different levels, the fair value is categorized based on the lowest level
input that is significant to the valuation.
Investments valued at the net asset value (NAV) per share (or its equivalent) have been classified separately in the table
below and include investments considered to be alternative investments as defined by the AICPA. The definition includes
investments for which a readily determinable fair value does not exist (that is, investments not listed on national
exchanges or over-the-counter markets, or for which quoted market prices are not available from sources such as
financial publications, the exchanges, or NASDAQ). These types of investments can be held within any of the asset
classes used by the State based on underlying portfolio holdings and analysis of risk and return relationships. These
investments can be structured in different ways, including limited partnerships, limited liability companies, common trusts
and mutual funds. Some are closed-ended with a specific life and capital commitment while others are open-ended with
opportunity for ad hoc contributions or withdrawals and termination upon proper notice.
Commingled/Mutual Funds – These types of funds are generally open-ended funds and may be utilized in equities or
fixed income asset classes. They are funds made up of underlying securities that have readily available fair values
(publicly traded stocks or bonds). The State owns units of these funds rather than the individual securities. Contributions
or withdrawals from these funds can be made as needed, generally with daily or monthly liquidity, with a notice period of
one to fifteen days. Because they are liquid funds, there are no unfunded commitments for these types of investments.
Private Credit – These investments include loans to private companies, privately placed debt of public companies, or
loans backed by real assets. Loan repayment can be derived from either cash flows from an operating company or cash
flows generated by a physical or esoteric asset. Private debt is typically secured and has various protections/covenants
in place. The debt is customized to the borrower’s requirement, thus rendering it illiquid. The State includes these
strategies within its global fixed income allocation through limited partnership-type structures. Private credit issuers may
be investment grade but are typically below-investment grade and similar in some respect to the syndicated bank loan
and high yield markets. The State employs two senior private debt funds, commonly referred to as direct lenders, which
are structured as custom managed accounts that are not eligible for redemptions during remaining investment lives of 2
to 3 years, and the unfunded commitments totaled $146.2 million as of June 30, 2019.
Private Equity - Private Equity investments are typically private interests in corporations across different areas of the
capital structure and in different stages of the corporations’ development via limited partnership vehicles. Private Equity
investments are illiquid and long term in nature (10-12 years), typically held until maturity. Private Equity portfolios
generally have a “J-Curve Effect” whereby there are low to negative returns in the initial years due to the payment of
investment management fees and initial funding of investments made by the General Partner during a period when
investments are typically carried at cost and returns have not been realized. To diversify the program, Private Equity
investments are made across business cycles, vintage years, and different strategies. The State has a dedicated sub-
asset class for private equity investments within its global equity allocation in the pension pool. The State does not the
option to request redemptions from its private equity funds. The General Partner distributes earnings and proceeds from
the sale of the underlying investments as transactions occur. The State has $339.9 million in unfunded private equity
commitments as of June 30, 2019.
Venture Capital – These include investments in companies in a range of stages of development from start-up/seed
stage, early stage, and later/expansion stage. Investments are typically made in years one through six and returns
typically occur in years four through ten.
Buyouts – These include investments in funds that seek out and purchase underperforming or undervalued companies
in order to improve them and sell them or take them public many years later. These funds are also often involved in
management buyouts, which are buyouts conducted by the management of the company being purchased, and they
often play key roles in leveraged buyouts, which are buyouts that are funded with borrowed money.
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STATE OF NORTH DAKOTA
Distressed Debt – These include investments in the debt instruments of companies which may be publicly traded or
privately held that are financially distressed and are either in bankruptcy or likely candidates for bankruptcy. Typical
holdings are senior and subordinated debt instruments, mortgages and bank loans. The State includes these types of
investments in its private equity asset class. As of June 30, 2019, unfunded commitments in one of its two distressed
debt funds totaled $76.9 million. The fund is not eligible for redemptions. The other fund is eligible for redemptions with
quarterly liquidity and 60 days notice, and has no unfunded commitment.
Mezzanine Debt – This strategy is a hybrid of debt and equity financing. It is basically debt capital that gives the lender
the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is
generally subordinated to senior debt. The State utilizes this strategy, through a limited partnership structure, in its global
fixed income allocation. The two funds in this category are not eligible for redemptions, have remaining lives of 2-5 years,
and unfunded commitments of $8.5 million as of June 30, 2019.
Equity Long/Short – This strategy is a combination of long and short positions, primarily in publicly traded equities. The
State utilizes this strategy, through a limited partnership structure, with its global equity allocations. This is an open-
ended fund with monthly liquidity with a notice period of 15 days. There was no unfunded commitment as of June 30,
2019.
Real Assets – These investments are intended to provide allocations to tangible assets that are expected to be inflation
protected and provide performance above the inflation rate as indicated by the CPI. Investments are generally structured
as limited partnerships or limited liability companies. Investments in Real Estate Assets include Real Estate, Timberland
and Infrastructure, as discussed below.
Real Estate – includes investments in private vehicles through limited partnerships or commingled vehicles that have an
ownership interest in direct real estate properties. The investment strategies may include “value added” strategies, which
derive their return from both income and appreciation, “opportunistic”, which derive their return primarily through
appreciation, and “alternative” which invest in less traditional types of property. Both domestic and international real
estate funds are utilized. The State has a dedicated sub-asset class for these types of investments within global real
assets. There are currently 10 different real estate funds in the portfolio. Three of those funds are open-ended vehicles
that accept redemption requests quarterly with a 30-90 day notification period. The remaining seven funds are closed-
ended limited partnerships that are not eligible for redemptions. Those seven funds have a combined unfunded
commitment of $114.4 million as of June 30, 2019.
Timberland – includes investments in limited liability companies that have an ownership interest in properties where the
value of the property is derived mainly from income-producing timber but also from the “higher and better use” value of
the underlying land. The State includes these assets within its global real asset allocations. There are three funds in the
portfolio and they have no unfunded commitments. The funds are not eligible for redemption other than distributions of
income and/or proceeds as determined by the investment manager. The funds have remaining lives of 2-7 years.
Infrastructure – includes investments in limited partnerships that have an ownership interest in transportation assets
such as toll roads, tunnels and bridges; and regulated assets such as electricity transmission, gas and oil distribution and
wastewater collection. Other possible investments would include communication assets and social infrastructure. The
State includes these assets within its global real assets allocations. The infrastructure investments in the portfolio as of
June 30, 2019, include both open and closed-ended funds. The open-ended funds have no unfunded commitments and
are eligible for redemptions quarterly with 90 days notice. There may be a 3-12 month queue for receiving redemptions.
The closed-ended funds have unfunded commitments of $243.9 million at June 30, 2019 and are not eligible for
redemptions.
Interest Rate Swap Agreements – Fair values for interest rate swap agreements are based upon the settlement value
adjusted by estimated nonperformance risk.
Derivative Instruments – Fair values of the grain future contracts are determined on the Minneapolis Grain Exchange.
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STATE OF NORTH DAKOTA
Fair Value
The following table shows the fair value leveling of the State’s assets and liabilities at June 30 (expressed in thousands).
Primary Government
INVESTMENTS MEASURED AT Fair Value
FAIR VALUE 6/30/19 Level 1 Level 2 Level 3
Short term securities:
Commercial paper $ 1,596 $ - $ 1,596 $ -
Short term bills and notes 475,691 143,721 331,970 -
Total short term securities 477,287 143,721 333,566 -
Fixed income investments:
Asset backed securities 424,218 - 416,713 7,505
Bank loans 4,372 - 4,372 -
Collateralized bonds 2,716 2,716 -
Collateralized mortgage obligations 41,484 - 41,484 -
Commercial mortgage-backed 286,647 - 284,331 2,316
Corporate bonds 2,121,267 - 2,117,557 3,710
Corporate convertible bonds 21,761 - 20,995 766
Funds - Fixed Income ETF 214,881 214,881 - -
Government Agencies 1,302,793 1,189,140 113,653 -
Government Bonds 988,727 196 988,531 -
Government MBS 1,547,300 - 1,547,300 -
Government - issued Commercial
Mortgage-Backed 101,527 - 101,527 -
Index Linked Government Bonds 584,015 - 584,015 -
Municipal / Provincial Bonds 36,474 - 36,474 -
Non- Government Backed C.M.O.s 63,752 - 57,495 6,257
Other Fixed Income 1,034 31 1,003 -
Collateralized Debt 17,035 - 17,035 -
Total fixed income investments 7,760,003 1,404,248 6,335,201 20,554
Equity Investments:
Common stock 4,869,128 4,869,062 2 64
Convertible equity 4,897 2,081 2,816 -
Funds - Equities ETF 409,492 409,492 - -
Preferred stock 20,979 20,979 - -
Rights / Warrants 776 776 - -
Stapled securities 4,520 4,520 - -
Total equity investments 5,309,792 5,306,910 2,818 64
Other Investments:
Currency 20,439 20,439 - -
FX Contracts 1 1 - -
Global Tactical Asset Allocation MF 826,883 826,883 - -
Master Limited Partnership 94,989 94,989 - -
REITs 8,268 8,268 - -
Real Estate 10,194 - - 10,194
Swaps 12,846 - 12,846 -
Total other investments 973,620 950,580 12,846 10,194
Derivative Investments:
Exchange cleared swaps (17,168) - (17,168) -
Options (288) (279) (9) -
Swaps 10,134 - 10,134 -
Grain future contracts 16 16 - -
Total derivative investments (7,306) (263) (7,043) -
Total investments measured at
fair value $ 14,513,396 $ 7,805,196 $ 6,677,388 $ 30,812
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STATE OF NORTH DAKOTA
Redemption
Frequency Redemption
INVESTMENTS MEASURED AT THE Fair Value Unfunded (If currently Notice
NET ASSET VALUE (NAV) 6/30/19 Commitments eligible) Period
Commingled Funds - Debt $ 1,393,182 $ - Daily, monthly 1 - 15 days
Commingled Funds - Equities 2,493,252 - Daily, monthly 1 - 15 days
Commingled Funds - Fixed Income 274,430 - Daily < 5 days
Quarterly, not
Distressed Debt 235,686 76,921 eligible 60 days
Long / short 223,575 - Monthly 15 days
Mezzanine Debt 496 8,499 Not eligible Not eligible
Private Credit 290,157 146,200 Not eligible Not eligible
Private Equity 229,364 339,869 Not eligible Not eligible
Quarterly, not 30 - 90
Real Assets 2,514,758 358,278 eligible days
Private Debt Fund 61,356 91,500
Total investments measured at the
NAV 7,716,256 $ 1,021,267
Total investments $ 22,229,652
Major Component Units
INVESTMENTS MEASURED AT Fair Value
FAIR VALUE 6/30/19 Level 1 Level 2 Level 3
Short term securities
Certificates of deposit $ 11,092 $ - $ 11,092 $ -
Short term bills and notes 41,123 - 41,123 -
Total short term securities 52,215 - 52,215 -
Fixed income investments:
Gov't Agencies 46,266 46,266 - -
Other Fixed Income 94 94 - -
Total fixed income investments 46,360 46,360 - -
Equity Investments:
Stock 22 22 - -
Other equities 330 330 - -
Total equity investments 352 352 - -
Other Investments:
Mineral acres 22 - - 22
Total other Investments 22 - - 22
Total investments $ 98,949 $ 46,712 $ 52,215 $ 22
NOTE 4 - NET POSITION
The government-wide Governmental Activities Statement of Net Position reports $6,639,785,616 of restricted net
position, of which $1,032,862,011 is restricted by enabling legislation.
NOTE 5 - FUND BALANCE
The following table on the next page presents further display the fund balances by major purpose.
Included in the General Fund, unassigned fund balance is $6,238,912,872 for the North Dakota Legacy Fund. The
Legacy Fund was established with thirty percent of total revenue derived from taxes on oil and gas production or
extraction. The principal and earnings of the Legacy Fund may not be spent until after June 30, 2017, and an expenditure
of principal after that date requires a vote of at least two-thirds of the members elected of each house of the legislative
assembly. No more than fifteen percent of the principal of the Legacy Fund can be expended during a biennium.
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STATE OF NORTH DAKOTA
Governmental Fund Balance By Purpose
(Expressed in Thousands)
Special Revenue
Nonmajor
General Federal State Governmental Total
Fund Balances:
Nonspendable
Inventory $ 2,955 $ 10,965 $ 10,705 $ - $ 24,625
Long - Term Receivables 12 - - - 12
Prepaid Expenditures 3,671 1,367 2,150 - 7,188
Permanent Trust fund for Veteran’s Postwar - - - 6,337 6,337
Permanent Trust fund for Coal Development - - - 70,214 70,214
Total Nonspendable 6,638 12,332 12,855 76,551 108,376
Restricted for:
Distribution to Common Schools - - 4,919,178 4,919,178
State Education Aid - - 430,679 - 430,679
Lignite Research - - 30,294 - 30,294
Water Projects and Energy Conservation - - 419,654 419,654
Well Plugging and Site Reclamation - - 22,132 - 22,132
Agriculture and Commerce - - 62,749 - 62,749
Natural Resources - - 30,259 - 30,259
Highway Projects - - 513,571 - 513,571
Transportation - - 25,611 - 25,611
Petroleum Tank Release Compensation - - 6,069 6,069
Debt Services - - - 784 784
Capital Improvement Projects 279 - - - 279
Other - - 27,575 - 27,575
Total Restricted 279 - 6,487,771 784 6,488,834
Committed to:
Strategic Investments & Improvements - - 905,001 - 905,001
Oil & Gas Impact Grants - - 29,187 - 29,187
Partnership in Assisting Community Expansion - - 58,438 - 58,438
Human Services & Health Operations - - 27,474 - 27,474
Outdoor Heritage Grants - - 30,552 - 30,552
Water Development & Management Projects - - 48,149 - 48,149
Oil & Gas Research - - 11,848 - 11,848
Judicial & Legal - - 12,974 - 12,974
Public Safety & Corrections 20,295 - 2,486 - 22,781
Agriculture & Commerce 6,025 - 5,630 - 11,655
State Rail & Special Roads - - 15,069 - 15,069
Insurance Regulatory Operations - - 6,393 - 6,393
Park & Recreation Operations - - 6,786 - 6,786
Tax Relief 182,300 - - - 182,300
Stabilization 118,646 - - - 118,646
Theodore Roosevelt Presidential Library & Museum 15,051 - - - 15,051
Veteran’s Postwar - - - 398 398
Other 5,906 - 27,497 83 33,486
Total Committed 348,223 - 1,187,484 481 1,536,188
Assigned to:
Education - - 3,374 - 3,374
Human Services & Health Operations - - 119,250 - 119,250
Judicial & Legal - - 11,048 - 11,048
Correction & Rehabilitation Operations - - 5,935 - 5,935
Strategic Investments & Improvements - - 229,325 - 229,325
Agriculture & Commerce - - 2,345 - 2,345
Other - - 3,333 - 3,333
Total Assigned - - 374,610 - 374,610
Unassigned 7,231,355 (1,642) - - 7,229,713
Total Fund Balances $ 7,586,495 $ 10,690 $ 8,062,720 $ 77,816 $ 15,737,721
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NOTE 6 - RETIREMENT SYSTEMS
A. DESCRIPTION OF PLANS
The State of North Dakota administers four major retirement systems: North Dakota Public Employees' Retirement
System, North Dakota Highway Patrolmen's Retirement System, Retirement Plan for the Employees of Job Service
North Dakota and the Teachers' Fund for Retirement. The State also administers the North Dakota Defined Contribution
Retirement Plan, which was established January 1, 2000. Certain state employees may also participate in a privately
administered retirement system: Teachers' Insurance Annuity Association. The following is a brief description of each
plan. More detailed information can be found in the plan agreements and the related legislation.
NORTH DAKOTA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS)
The North Dakota Public Employees' Retirement System (PERS) is a cost-sharing multiple-employer defined benefit
pension plan covering substantially all employees of the State of North Dakota, its agencies, and various participating
political subdivisions (Main System). It also covers Supreme and District Court judges, the National Guard Security
Officers and Firefighters, peace officers and correctional officers employed by political subdivisions and as of August 1,
2017, firefighters employed by participating political subdivisions. Effective August 1, 2015, current and newly eligible
members of the National Guard System were transferred to the Law Enforcement System. It is not subject to the
provisions of the Employee Retirement Security Act of 1974. PERS issues a publicly available financial report that may
be obtained by writing to North Dakota Public Employees Retirement System, 400 East Broadway, Suite 505, Bismarck,
North Dakota 58501.
At June 30, 2019, the number of participating political subdivisions in PERS was:
Cities 94
Counties 50
School Districts 125
Other 85
Total Participating Local Political Subdivisions 354
Administration
The North Dakota Retirement Board was created by the State Legislature and is the governing authority of PERS.
Benefit and contribution provisions are administered in accordance with chapter 54-52 of the North Dakota Century
Code.
Responsibility for administration of the three defined benefit pension plans and the defined contribution plan is assigned
to a Board comprised of nine members. The Board consists of a Chairman, who is appointed by the Governor; one
member appointed by the Attorney General; one member appointed by the State Health Officer; two members of the
legislative assemble appointed by a chairman of the legislative management, three members elected by the active
membership of the NDPERS system; and one member elected by the retired public employees.
The costs of administering the plan are financed through the contributions and investment earnings of each plan.
Benefits
Pension benefits are set by statute. The System has no provisions or policies with respect to automatic and ad hoc post-
retirement benefit increases. Members are entitled to unreduced monthly pension benefits beginning when the sum of
age and years of credited service equals or exceeds 85 (Rule of 85), or at normal retirement age (65). For members
hired on or after January 1, 2016 the Rule of 85 will be replaced with the Rule of 90 with a minimum age of 60. The
annual pension benefit is equal to 2.00% of their average monthly salary, using the highest 36 months out of the last 180
months of service, for each year of service. For members hired on or after January 1, 2020 the annual pension benefit is
equal to 1.75% of their average monthly salary, using the three highest periods of twelve consecutive months employed
during the last one hundred eighty months of employment. The Plan permits early retirement at ages 55-64 with five or
more years of service.
Supreme and district court judges are entitled to unreduced monthly pension benefits beginning at the normal retirement
age (65) or Rule of 85. The monthly pension benefit for Supreme and district court judges is equal to a percentage of
average monthly salary using the highest 36 consecutive months out of the last 180 months of service. The percentage is
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equal to 3.5% of final average monthly salary multiplied by the first 10 years of service, plus 2.80% of the average
monthly salary times the second 10 years of service, plus 1.25% of average monthly salary times years of service in
excess of 20 years. The judicial retirement formula is only applied to eligible judicial service. Non-judicial service benefits
are calculated using the 2.00% multiplier. The plan permits early retirement at ages 55-64, with five or more years of
service.
The monthly pension benefit for National Guard at normal retirement age (55). Effective August 1, 2015, the National
Guard System will become part of the Law Enforcement System. Members of the Law Enforcement are entitled to
unreduced monthly pension benefits at normal retirement age (55) or the rule of 85. The monthly pension benefit for the
National Guard/Law Enforcement is equal to 2.00 percent of their average monthly salary, using the highest 36 months
out of the last 180 months of service, for each year of service. The plan permits early retirement at ages 50-55 with three
or more years of service for members.
Members may elect to receive the pension benefits in the form of a single life, joint and survivor, term-certain annuity, or
partial lump sum with ongoing annuity. Members may elect to receive the value of their accumulated contributions, plus
interest, as a lump sum distribution upon retirement or termination, or they may elect to receive their benefits in the form
of an annuity. For each member electing an annuity, total payment will not be less than the employee’s accumulated
contributions plus interest.
Death and Disability Benefits
Death and disability benefits are set by statute. If an active employee dies with less than three years of service for the
Main System and National Guard/Law Enforcement, or less than five years of service for Supreme and district court
judges, a death benefit equal to the value of the employee's accumulated contributions, plus interest, is paid to the
employee's beneficiary. If the employee has earned more than three years of service for the Main System and National
Guard/Law Enforcement, the surviving spouse will be entitled to a single payment refund, life-time monthly payments in
an amount equal to 50% of the employee's accrued normal retirement benefit, or monthly payments in an amount equal
to the employees’ accrued 100% joint and survivor retirement benefit if the member had reached normal retirement age
prior to date of death. If the surviving spouse dies before the employee's accumulated pension benefits are paid, the
balance will be payable to the surviving spouse's designated beneficiary.
For judges only who have earned five years of credited service, the death benefit is changed to the greater of (i) lump
sum payment of accumulated contributions, and (ii) 100% of the member’s accrued benefit (not reduced on account of
age), payable for the spouse's lifetime.
Eligible members who become totally disabled after a minimum of 180 days of service receive monthly disability benefits
that are equal to 25% of their final average salary with a minimum benefit of $100. To qualify under this section, the
member has to become disabled during the period of eligible employment and apply for benefits within one year of
termination. The definition for “disabled” is set by the Board in the North Dakota Administrative Code.
For Judges only, the disability benefit formula is changed to 70% of final average salary minus social security and
workers compensation benefits.
Refunds of Member Contributions
Upon termination, if a member is not vested (is not 65 or does not have three years of service for the Main System and
National Guard/Law Enforcement, or five years of service for the Supreme and district court judges, credited for PERS),
they will receive the accumulated member contributions plus interest. If an employee has vested, they have the option of
applying for a refund or can remain as a terminated vested participant. If a member terminated and withdrew their
accumulated employee contribution and is subsequently re-employed, they have the option of repurchasing their prior
service.
Contributions
Contribution rates are set by state statute and are a percentage of salaries and wages.
Members that made a qualifying election under Senate Bill 2015 to move from the Defined Contribution Plan back to the
Defined Benefit Plan have a 2% increase on employee contributions. The 2019 Legislative Assembly passed legislation
that ended the RHIC plan for new hires after January 1, 2020 and redirected the 1.14% RHIC employer contribution to
the retirement account for both the PERS plan as well as the defined contribution plan.
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Member contributions are set by state statue and are a percentage of salaries and wages. During the 1983-1985
biennium, the State implemented the employer pickup provision of the IRS code, whereby a portion or all of the required
member contributions are made by the employer. The State is paying 4% of the full member contribution. Some of the
political subdivisions are paying all or part of the member contributions. Employer contributions are set by statue except
the contribution rates for the National Guard/Law Enforcement Plans which are set by the Board. Contribution rates are
established as a percent of covered compensation as follows:
Member Employer
Contributions Contributions
PERS*
Members first enrolled prior to 1/1/20 7.00% 7.12%
Members first enrolled after to 1/1/20 7.00% 8.26%
Members returning to the Defined Benefit
Plan as a result of Senate Bill 2015 9.00% 7.12%
Judges Retirement System 8.00% 17.52%
Law Enforcement with previous service
State – BCI Plan 6.00% 9.81%
State – National Guard 5.50% 9.81%
Political subdivisions 5.50% 9.81%
Law Enforcement without previous service 5.50% 7.93%
*Members making the election to move from the Defined Contribution Plan back to the Defined Benefit Plan as a result of Senate
Bill 2015 pay a 9.00% employee contribution.
The member's account balance includes employee contributions, interest, and the vested employer contributions equal to
the member's contributions to an eligible deferred compensation plan. Members of the Supreme and District Court
Judges are not eligible to vest in the employer contributions if contributing to the deferred compensation plan.
The minimum monthly member contribution is $25, and the maximum may not exceed certain parameters based upon
years of service.
NORTH DAKOTA HIGHWAY PATROLMEN’S RETIREMENT SYSTEM (NDHPRS)
The North Dakota Highway Patrolmen's Retirement System is a single-employer defined benefit pension plan covering
substantially all sworn officers of the Highway Patrol of the State of North Dakota. It is not subject to the provisions of the
Employee Retirement Income Security Act of 1974. NDHPRS issues a publicly available financial report that may be
obtained by writing to North Dakota Public Employees Retirement System, 400 East Broadway, Suite 505, Bismarck,
North Dakota 58501.
Administration
The North Dakota Retirement Board was created by the State Legislature and is the governing authority of NDHPRS.
See PERS Administration note for composition of the Retirement Board. Benefit and contribution provisions are
administered in accordance with chapter 39-03 of the North Dakota Century Code.
The costs of administering the plan are financed through the contributions and investment earnings of the plan.
Benefits
Pension benefits are set by statute. The System has no provisions or policies with respect to automatic and ad hoc post-
retirement benefit increases. Members are entitled to unreduced pension benefits upon attainment of age 55 and 10
years of eligible employment or when the sum of age and years of credited service equals or exceeds 80. The annual
pension benefit is equal to a percentage of average monthly salary using the highest 36 months out of the last 180
months of service. The percentage is equal to the sum of the first 25 years of service multiplied by 3.60% and 1.75%
multiplied by years of service in excess of 25, if any. The plan permits early retirement at ages 50-54, with ten or more
years of service.
Members may elect to receive the pension benefits in the form of a single life, joint and survivor, term-certain annuity, or
partial lump sum with ongoing annuity. Members may elect to receive the value of their accumulated contributions, plus
interest, as a lump sum distribution upon retirement or termination, or they may elect to receive their benefits in the form
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of an annuity. For each member electing an annuity, total payment will not be less than the members’ accumulated
contributions plus interest.
Death and Disability Benefits
Death and disability benefits are set by statute. If an active member dies with less than 10 years of credited service, a
death benefit equal to the value of the member's accumulated contributions, plus interest, is paid to the member 's
beneficiary. If the member has earned more than 10 years of credited service, the surviving spouse, if any, will be entitled
to a single payment refund, life-time monthly payments in an amount equal to 50 percent of the member 's accrued
normal retirement benefit. If the surviving spouse dies before the member 's accumulated pension benefits are paid, the
balance will be payable to any designated beneficiary.
Eligible member s who become totally disabled after a minimum of 180 days service receive monthly disability benefits
that are up to 70 percent of their final average salary, reduced by workers compensation with a minimum benefit of $100.
To qualify under this section, the member must meet the criteria established by the Retirement Board for being totally
disabled and apply for benefits within one year of termination.
Refunds of Member Contributions
Upon termination, if a member is not vested (is not 60 or does not have ten years of service credited for NDHPRS), they
will receive the accumulated member contributions plus interest. If an employee has vested, they have the option of
applying for a refund or can remain as a terminated vested participant. If a member terminated and withdrew their
accumulated employee contribution and is subsequently re-employed, they have the option of repurchasing their prior
service.
Contributions
Contribution rates for NDHPRS are set by state statute and are a percentage of covered compensation. The State is
paying 4.0% of the member contribution. The member contribution rate is 13.3% and the employer rate is 19.7%.
RETIREMENT PLAN FOR THE EMPLOYEES OF JOB SERVICE NORTH DAKOTA (JSND)
The retirement plan for employees of Job Service North Dakota is a single-employer defined benefit public employee
retirement plan administered by PERS. The plan is established under NDCC 52-11-01 with benefit provisions established
through the plan document, as amended by the Board. This plan document, as amended, is authorized by the Plan
Administrator, who is the Executive Director of the agency. JSND issues a publicly available financial report that may be
obtained by writing to Job Service North Dakota, PO Box 5507, Bismarck, North Dakota 58506-5507.
Participation in the plan is limited to employees participating in the plan as of September 30, 1980.
Administration
On August 1, 2003, the administrative authority and the net position of the Retirement Plan for Employees of Job Service
North Dakota were transferred from the agency to the Public Employees Retirement System Board. This action was
based on the passage of House Bill 1064 by the Fifty-eighth Legislative Assembly of North Dakota. The Retirement Plan
for Employees of Job Service has an Actuarial Valuation Report produced annually. Requests to obtain or review this
report should be addressed to the Executive Director, NDPERS, 400 East Broadway, Suite 505, Bismarck, North Dakota
58501.
The costs of administering the plan are financed through the contributions and investment earnings of the plan.
Benefits
Benefits are established through the plan document, as amended by the Board. The System provides a post-retirement
cost-of living adjustment each year based on the Consumer Price Index. Employees are entitled to annual pension
benefits beginning at normal retirement age (65). Employees may elect optional retirement eligibility at age 62 with 5
years of credited service, at age 60 with 20 years of credited service, or at age 55 with 30 years of credited service.
Pension benefits are calculated based on the final average earnings (basic monthly earnings averaged over the highest
three consecutive years of basic earnings) of the employee multiplied by the sum of:
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1.5% times years of credited service up to 5 plus;
x 1.75% times years of credited service between 6 and 10 plus;
x 2.0% times years of credited service in excess of 10.
Death and Disability Benefits
The plan provides retirement, disability and death benefits. If death of a participant occurs prior to their annuity starting
date, the surviving spouse who has been married at least two years prior to the participant’s death or, if married less than
two years is a parent of a child of this marriage, then the spouse shall receive monthly benefits. The amount is the
greater of the benefit had the participant retired on the day before they died and elected the Contingent Annuitant Option
with 55% of their retirement benefit continued to their spouse or 55% of the smaller of 40% of the deceased participant’s
average monthly earnings or the deceased participant’s normal retirement benefit obtained by increasing their credited
service by the period of time between their date of death, and the date they would have attained age 60. Upon
remarriage of the surviving spouse before age 60, the death benefit will cease.
If a participant becomes totally disabled, they will be eligible for a monthly disability benefit which shall be equal to the
greater of 40% of the participant’s average annual earnings or the accrued benefit determined as of their date of
disability.
Refunds of Member Contributions
Upon termination, if a member of the JSND System terminates employment before retirement payments begin,
participation in the retirement plan will cease. No further additions to retirement income will accrue on the member’s
behalf, and the member may be paid under one of the following options.
* The member may be paid an amount of retirement income with payments starting at Normal, Optional, or Early
Retirement Date. The amount of that income will be equal to the amount provided under the formula according to the
member’s years of credited service and earnings.
* The member may receive a cash withdrawal benefit equal to the total of the member’s contributions and employer
contributions made on their behalf, plus 4 percent interest compounded annually. The member may elect this option at
any time after withdrawal and before Normal, Optional, or Early Retirement Date, but such benefit shall be in place of
all other benefits under the retirement benefits section.
Contributions
Employees’ contributions are established at 7% of total compensation. The funding policy of the plan provides for
employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are
designed to accumulate sufficient assets to pay benefits when due. Effective July 1, 1999, the “scheduled contribution”
will be zero as long as the plan’s actuarial value of assets exceeds the actuarial present value of projected benefits. The
"scheduled contribution" and amortization will be determined when the plan is not in surplus and will be based on a
funding policy adopted by the Employer.
TEACHERS' FUND FOR RETIREMENT (TFFR)
The North Dakota Teachers' Fund for Retirement is a cost-sharing multiple-employer defined benefit pension plan
covering all North Dakota public teachers and certain other teachers who meet various membership requirements. TFFR
provides for pension, death and disability benefits. The cost to administer the TFFR plan is financed by investment
income and contributions.
Teachers’ Fund for Retirement issues a publicly available financial report that may be obtained by writing to the
Retirement and Investment Office, 3442 East Century Avenue, P.O. Box 7100, Bismarck, North Dakota 58507-7100.
At June 30, 2019, the number of participating employer units in TFFR was:
Type Number
Public School Districts 175
County Superintendents 6
Special Education Units 19
Vocational Education Units 4
Other 9
Total 213
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Administration
Responsibility for administration of the TFFR benefits program is assigned to a seven-member Board of Trustees
(Board). The Board consists of the State Treasurer, the Superintendent of Public Instruction, and five members
appointed by the Governor. The appointed members serve five-year terms which end on June 30 of alternate years. The
appointed Board members must include two active teachers, one active school administrator, and two retired members.
The Board submits any necessary or desirable changes in statues relating to the administration of the fund, including
benefit terms, to the Legislative Assembly for consideration. The Legislative Assembly has final authority for changes to
benefit terms and contributions rates.
Benefits
For purposes of determining pension benefits, members are classified within one of three categories. Tier 1
grandfathered and Tier 1 non-grandfathered members are those with service credit on file as of July 1, 2008. Tier 2
members are those newly employed and returning refunded members on or after July 1, 2008.
Tier 1 Grandfathered – A Tier 1 grandfathered member is entitled to receive unreduced benefits when three or more
years of credited service as a teacher in North Dakota have accumulated, the member is no longer employed as a
teacher and has reached age 65, or the sum of age and years of service equals or exceeds 85. TFFR permits early
retirement from ages 55 to 64, with benefits actuarially reduced by 6% per year for every year the member’s retirement
age is less than 65 years or the date as of which age plus service equal 85. In either case, benefits may not exceed the
maximum benefits specified in Section 415 of the Internal Revenue Code.
Pension benefits paid by TFFR are determined by NDCC Section 15-39.1-10. Monthly benefits under TFFR are equal to
the three highest annual salaries earned divided by 36 months and multiplied by 2.00% times the number of service
credits earned. Retirees may elect payment of benefits in the form of a single life annuity, 100% or 50% joint and survivor
annuity, ten or twenty-year term certain annuity, partial lump-sum option or level income with Social Security benefits.
Members may also qualify for benefits calculated under other formulas.
Tier 1 Non-grandfathered – A Tier 1 non-grandfathered member is entitled to receive unreduced benefits when three or
more years of credited service as a teacher in North Dakota have accumulated, the member is no longer employed as a
teacher, and the member has reached the age 65, or has reached age 60 and the sum of age and years of service credit
equals or exceeds 90. TFFR permits early retirement from ages 55-64, with benefits actuarially reduced by 8% per year
from the earlier of age 60/Rule of 90 or age 65. In either case, benefits may not exceed the maximum benefits specified
in Section 415 of the Internal Revenue Code.
Pension benefits paid by TFFR are determined by NDCC Section 15-39.1-10. Monthly benefits under TFFR are equal to
the three highest salaries earned divided by 36 months and multiplied by 2.00% times the number of service credits
earned. Retirees may elect payment of benefits in the form of a single life annuity, 100% or 50% joint and survivor
annuity, ten or twenty-year term certain annuity, partial lump-sum option or level income with Social Security benefits.
Members may also qualify for benefits calculated under other formulas.
Tier 2 – A Tier 2 member is entitled to receive unreduced benefits when five or more years of credited service as a
teacher in North Dakota have accumulated, the member is no longer employed as a teacher and has reached age 65, or
has reached age 60 and the sum of age and years of service credit equals or exceeds 90. TFFR permits early retirement
from ages 55 to 64, with benefits actuarially reduced by 8% per year from the earlier of age 60/Rule of 90 or age 65. In
either case, benefits may not exceed the maximum benefits specified in Section 415 of the Internal Revenue Code.
Pension benefits paid by TFFR are determined by NDCC Section 15-39.1-10. Monthly benefits under TFFR are equal to
the five highest annual salaries earned divided by 60 months and multiplied by 2.00% times the number of service credits
earned. Retirees may elect payment of benefits in the form of a single life annuity, 100% or 50% joint and survivor
annuity, ten or twenty-year term certain annuity, partial lump-sum option or level income with Social Security benefits.
Members may also qualify for benefits calculated under other formulas.
Death and Disability Benefits
Death benefits may be paid to a member’s designated beneficiary. If a member’s death occurs before retirement, the
benefit options available are determined by the member’s vesting status prior to death. If a member’s death occurs after
retirement, the death benefit received by the beneficiary (if any) is based on the retirement plan the member selected at
retirement.
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An active member is eligible to receive disability benefits when: (a) a total disability lasting twelve months or more does
not allow the continuation of teaching, (b) the member has accumulated five years of credited service in North Dakota,
and (c) the Board of Trustees of TFFR has determined eligibility based upon medical evidence. The amount of the
disability benefit is computed by the retirement formula in NDCC 15-39.1-10 without consideration of age and uses the
member’s actual years of credited service. There is no actuarial reduction for reason of disability retirement.
Contributions
Member and employer contributions paid to TFFR are set by NDCC 15-39.1-09. Every eligible teacher in the state of
North Dakota is required to be a member of TFFR and is assessed at a rate of 11.75% of salary as defined by NDCC 15-
39.1-04. Every governmental body employing a teacher must also pay into TFFR a sum equal to 12.75% of the teacher’s
salary. Member and employer contributions will be reduced to 7.75% each when the fund reaches 100% funded ratio on
an actuarial basis.
A vested member who terminates covered employment may elect a refund of contributions paid plus 6% or defer pay-
ment until eligible for pension benefits. A nonvested member who terminates covered employment must claim a refund of
contributions paid before 70½. Refunded members forfeit all service credits under TFFR. These service credits may be
repurchased upon return to covered employment under certain circumstance defined by state statue.
EMPLOYEE MEMBERSHIP DATA
The following table summarizes employee membership information by plan at the actuarial valuation date:
PERS NDHPRS JSND TFFR
Retirees and beneficiaries currently receiving benefits: 12,300 136 189 8,918
Terminated Employees:
Vested 6,755 31 1 1,657
Nonvested 6,512 11 - 1,035
Active Employees:
Vested 17,119 71 7 7,936
Nonvested 6,635 73 - 3,239
Total plan membership 49,321 322 197 22,785
Date of annual valuation July 1, 2019 July 1, 2019 July 1, 2019 July 1, 2019
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
BASIS OF ACCOUNTING
The public employee retirement systems described above are considered part of the State of North Dakota's reporting
entity and are included in the State's financial statements as pension trust funds. The financial statements of these
systems are prepared using the accrual basis of accounting. Employee contributions are recognized as revenues in the
period in which they are due. Employer contributions are recognized when due and the employer has made a formal
commitment to provide the contribution. Benefits and refunds are recognized when due and payable in accordance with
the terms of the plans.
INVESTMENT POLICY
The System’s Board is responsible for establishing the investment policy for the fund assets, which includes setting
investment goals and specifying the percentage of assets to be invested in various types of investments for PERS,
NDHPRS and JSND. The investment goals are viewed over the long term. The Board recognizes the plans’ performance
objectives, benefit projections, and capital market expectations when determining the asset allocation. The SIB is
responsible for managing the System’s investments in accordance with the investment policy.
The TFFR Board is responsible for establishing investment policy for the fund assets under NDCC 15-39.1-05.2. Benefit
payments are projected to occur over a long period of time. This allows TFFR to adopt a long-term investment horizon
and asset allocation policy for the management of fund assets. Asset allocation policy is critical because it defines the
basic risk and return characteristics of the investment portfolio. Asset allocation targets are established using an asset-
liability analysis designed to assist the Board in determining an acceptable volatility target for the fund and an optimal
asset allocation policy mix. This asset-liability analysis considers both sides of the plan balance sheet, utilizing both
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quantitative and qualitative inputs, in order to estimate the potential impact of various asset class mixes on key measures
of total plan risk, including the resulting established impact of funded status and contribution rates.
The following was the asset allocation policy as of June 30, 2019:
Target Allocation
PERS and
NDHPRS JSND TFFR RHIC*
Domestic equities 30.0% 6.0% 0.0% 39.0%
International equities 21.0% 14.0% 0.0% 21.0%
Private equity 7.0% 6.0% 0.0% 0.0%
Domestic fixed income 23.0% 74.0% 0.0% 40.0%
International fixed income 0.0% 0.0% 0.0% 0.0%
Global real assets 19.0% 0.0% 18.0% 0.0%
Global equity 0.0% 0.0% 58.0% 0.0%
Global fixed income 0.0% 0.0% 23.0% 0.0%
Cash equivalents 0.0% 0.0% 1.0% 0.0%
Total 100.00% 100.00% 100.00% 100.00%
*See note 7 for further details of the RHIC OPEB Plan.
INVESTMENT RATE OF RETURN
The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the
changing amounts actually invested. The annual money-weighted rate of return on pension plan investments, net of
pension plan investment expense, was as follows for June 30, 2019:
PERS 5.69%
NDHPRS 5.39%
JSND 7.00%
TFFR 5.46%
RHIC* 6.75%
*See note 7 for further details of the RHIC OPEB Plan.
METHOD USED TO VALUE INVESTMENTS
Investments are recorded at fair value determined by reference to published market data for publicly traded securities
and through the use of independent valuation services and appraisals for other investments. The net increase in fair
value of investments consists of the realized gains or losses and the unrealized increase or decrease in fair value of
investments during the year. Realized gains and losses on sales of investments are computed based on the difference
between the sales price and the original cost of the investment sold. Realized gains and losses on investments that had
been held in more than one fiscal year and sold in the current fiscal year were included as a change in the fair value of
investments reported in the prior year(s) and the current year. Unrealized gains and losses are computed based on
changes in the fair value of investments between years. Security transactions are accounted for on a trade date basis.
Interest income is recognized when earned. Dividend income is recorded on the ex-dividend date.
REALIZED GAINS AND LOSSES
Realized gains and losses on sales of investments are components of net change in fair value of investments and are
computed as described in note 1. For the year ended June 30, 2019, the following are the net realized gains (losses):
PERS $78,102,906
NDHPRS 2,079,637
JSND 2,901,971
TFFR 66,548,800
Retiree Health Insurance Credit (RHIC) 7,871,283
Defined Contribution Plan 230,794
Deferred Compensation Plan 6,454,352
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C. FUNDING STATUS AND PROGRESS
NET PENSION LIABILITY OF THE PLANS
The components of the net pension liability of the Plans at June 30, 2019 were as follows (expressed in thousands):
PERS NDHPRS JSND TFFR
Total pension liability $ 4,269,340 $ 106,315 $ 66,197 $ 3,993,424
Plan fiduciary net position (3,096,731) (81,415) (97,203) (2,616,171)
Net pension liability (asset) $ 1,172,609 $ 24,900 $ (31,006) $ 1,377,253
Plan fiduciary net position as a
percentage of the total pension liability 72.53% 76.58% 146.84% 65.50%
ACTUARIAL ASSUMPTIONS
PERS
The total pension liability was determined by an actuarial valuation as of July 1, 2019, using the following actuarial
assumptions:
Actuarial Cost Method: Entry Age Normal
Asset Valuation Method: Plan Fiduciary Net Position (Market value of assets, no assets smoothing)
Inflation: 2.50%
Salary Increase: 4.00% to 20.00% including inflation
Retirement Age: Age-based tale of rates that specify to the type of eligible condition
Investment Rate of Return: 7.75%
Mortality Rates: Mortality rates for active members, inactive members and healthy retirees were based on the RP-2000
Combined Healthy Mortality Table, set back two years for males and three years for females, projected generationally
using the SSA 2014 Intermediate Cost scale from 2014. For disabled retirees, mortality rates were based on the RP-
2000 Disabled Mortality Table, set back one year for males (no setback for females) multiplied by 125%.
Other Notes: The calculation of Final Average Salary was changed for members who terminate after December 31,2019.
The interest rate on member contributions will decrease from 7.25% to 7.00% effective January 1, 2020.
The benefit accrual rate for members first enrolled on or after January 1, 2020 in the Main and Public Safety Systems is
1.75% (compared to 2.00% for members enrolled before January 1, 2020.
The investment return assumption was updated from 7.75% to 7.50% beginning with the actuarial valuation as of July 1,
2019. The economic assumptions (excluding salary increases) were updated beginning with the actuarial valuation as of
July 1, 2017 based on a review performed by GRS. All other actuarial assumptions were adopted by the Board based on
an experience study covering the period July 1, 2009 through June 30, 2014.
The employer rates to the System are the statutory/Board approved contribution rates of 7.12% of payroll for the Main
System (8.26% for members enrolled on or after January 1, 2020), 17.52% for the Judges System, 9.81% for the Public
Safety with prior Main System, and 7.93%for the Public Safety without prior Main System service System.
HPRS
The total pension liability was determined by an actuarial valuation as of July 1, 2019, using the following actuarial
assumptions:
Actuarial Cost Method: Entry Age Normal
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STATE OF NORTH DAKOTA
Asset Valuation Method: Plan Fiduciary Net Position (Market value of assets, no assets smoothing)
Inflation: 2.50%
Salary Increase: Service-based table for members with less than five years of service and age-based table for members
with more than five years of service
Retirement Age: Age-based tale of rates that specify to the type of eligible condition
Investment Rate of Return: 7.75%
Mortality Rates: Mortality rates for active members, inactive members and healthy retirees were based on the RP-2000
Combined Healthy Mortality Table, set back two years for males and three years for females, projected generationally
using the SSA 2014 Intermediate Cost scale from 2014. For disabled retirees, mortality rates were based on the RP-
2000 Disabled Mortality Table, set back one year for males (no setback for females) multiplied by 125%.
Other Notes: There were no benefit changes during the year.
The economic assumptions (excluding salary increases) were updated beginning with the actuarial valuation as of July 1,
2017 based on a review performed by GRS. The investment return assumption was decreased from 7.75% to 7.50%
beginning with the actuarial valuation as of July 1, 2019. All other actuarial assumptions were adopted by the Board
based on experience study covering the period July 1, 2009 through June 30, 2014.
The employer rate to the System is the statutory contribution rate of 19.70% payroll.
JSND
The total pension liability was determined by an actuarial valuation as of July 1, 2019, using the following actuarial
assumptions:
Actuarial Cost Method: Entry Age Normal
Asset Valuation Method: Plan Fiduciary Net Position (Market value of assets, no assets smoothing)
Inflation: 2.50%
Salary Increase: 3.50%
Retirement Age: Age-based tale of rates that specify to the type of eligible condition
Investment Rate of Return: 4.75%
Cost of Living Adjustment: 2.50%
Mortality Rates: Mortality rates for active members, inactive members and healthy retirees were based on the RP-2000
Combined Healthy Mortality Table, set back two years for males and three years for females, projected generationally
using the SSA 2014 Intermediate Cost scale from 2014. For disabled retirees, mortality rates were based on the RP-
2000 Disabled Mortality Table, set back one year for males, (no setback for females) multiplied by 125%.
Other Notes: There were no benefit changes during the year.
The economic assumptions (excluding salary increases) were updated beginning with the actuarial valuation as of July 1,
2017 based on a review performed by GRS. The investment return assumption was decreased from 5.70% to 4.75%
beginning with the actuarial valuation as of July 1, 2018. All other actuarial assumptions were adopted by the Board
based on experience study covering the period July 1, 2009 through June 30, 2014.
The System has assets in excess of the present value of future benefits. Therefore, no employer contributions are being
made.
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STATE OF NORTH DAKOTA
TFFR
The total pension liability was determined by an actuarial valuation as of July 1, 2019, using the following actuarial
assumptions:
Actuarial Cost Method: Entry Age Normal
Asset Valuation Method: 5 year smoothed market
Inflation: 2.75%
Salary Increase (Payroll Growth): 4.25% - 14.50%; varying by service, including inflation and productivity.
Retirement Age: In the 2015 valuation, rates of retirement were changed to better reflect anticipated future experience. In
the 2010 valuation, expected retirement ages of plan members were adjusted to more closely reflect actual experience.
Investment Rate of Return: 7.75%, net of investments expense.
Cost of Living Adjustment: None
Mortality Rates: In the 2015 valuation, assumed life expectancies were adjusted as a result of adopting the RP-2014
mortality tables with generational improvement. In prior years, those assumptions were based on percentages of GRS
post termination non-disabled tables and RP-2000 disabled-life tables.
INVESTMENT RATE OF RETURN
The long-term expected rate of return on investments was determined using a building-block method in which best-
estimates ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and
inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate
of return by weighting the expected future real rates to return by the target asset allocation percentage and by adding
expected inflation. Estimates of arithmetic real rates of return, for each major asset class included in the pension plan’s
target asset allocation as of July 1, 2019 is summarized in the following tables:
PERS and Long-Term Long-Term Long-Term
NDHPRS Expected Real JSND Expected Real TFFR Expected Real
Asset Class Rate of Return Asset Class Rate of Return Asset Class Rate of Return
Domestic equity 6.25% Domestic equities 4.75% Global equity 6.90%
Global fixed
International equity 6.95% Core fixed income 1.91% income 2.10%
Limited duration fixed Global real
Private equity 10.15% income 1.13% assets 5.40%
Cash
Domestic fixed income 2.11% Global equity 5.31% equivalents 0.00%
International fixed Diversified short-term
income 0.00% fixed income 1.66%
Short-term corporate
Global real assets 5.41% fixed income 0.49%
Cash equivalents 0.00% US high yield 3.49%
Emerging market
debt 4.68%
DISCOUNT RATE
For PERS, GASB Statement No. 67 includes a specific requirement for the discount rate that is used for the purpose of
the measurement of the Total Pension Liability. This rate considers the ability of the System to meet benefit obligations in
the future. To make this determination, employer contributions, employee contributions, benefit payments, expenses and
investment returns are projected into the future. The current employer and employee fixed rate contributions are
assumed to be made in each future year. The Plan Net Position (assets) in future years can then be determined and
compared to its obligation to make benefit payments in those years. In years where assets are not projected to be
sufficient to meet benefit payments, the use of a municipal bond rate is required.
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STATE OF NORTH DAKOTA
The Single Discount Rate (SDR) is equivalent to applying these two rates to the benefits that are projected to be paid
during the different time periods. The SDR reflects (1) the long-term expected rate of return on pension plan investments
(during the period in which the fiduciary net position is projected to be sufficient to pay benefits) and (2) a tax-exempt
municipal bond rate based on an index of 20-year general obligation bonds with an average AA credit rating as of the
measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met).
For the purpose of this valuation, the expected rate of return on pension plan investments is 7.50%; the municipal bond
rate is 3.13%; and the resulting Single Discount Rate is 7.50%.
For HPRS, the discount rate used to measure the total pension liability was 7.50% as of June 30, 2019.
For JSND, the discount rate was 4.75% as of June 30, 2019. The projection of cash flows used to determine the discount
rate assumed plan member and employer contributions will be made at rates equal to those based on the July 1, 2019
Actuarial Valuation Reports. For this purpose, only employer contributions that are intended to fund benefits of current
plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service
costs of future plan members and their beneficiaries, as well as projected contributions from future plan members, are
not included. Based on those assumptions (for JSND it is assumed no future contribution will be made), the pension
plans’ fiduciary net position were projected to be available to make all projected future benefit payments for current plan
members as of June 30, 2019. Therefore, the long-term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the total pension liability as of June 30, 2019.
For TFFR, the discount rate was 7.75% as of June 30, 2019. The projection of cash flows used to determine the discount
rate assumed plan member and employer contributions will be made at rates equal to those based on the July 1, 2019
Actuarial Valuation Reports. For this purpose, only employer contributions that are intended to fund benefits of current
plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service
costs of future plan members and their beneficiaries, as well as projected contributions from future plan members, are
not included. Based on those assumptions TFFR’s fiduciary net position was projected to be available to make all
projected future benefit payments for current plan members as of July 1, 2019. Therefore, the long-term expected rate of
return on pension plan investments was applied to all periods of projected benefit payments to determine the total
pension liability as of June 30, 2019.
SENSITIVITY OF NET PENSION LIABILITY
The following presents the net pension liability of the Plans as of June 30, 2019, calculated using the discount rate of
7.50% for PERS, 7.50% for NDHPRS, 4.75% for JSND and 7.75% for TFFR, as well as what the Plan’s net pension
liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher
than the current rate
Net Pension Liability (Asset) 1% Decrease Current Discount Rate 1% Increase
As of June 30, 2019 (6.50%) (7.50%) (8.50%)
PERS $ 1,697,748,658 $ 1,172,608,884 $ 731,651,266
Net Pension Liability (Asset) 1% Decrease Current Discount Rate 1% Increase
As of June 30, 2019 (6.50%) (7.50%) (8.50%)
NDHPRS $ 38,662,943 $ 24,899,511 $ 13,491,914
Net Pension Liability (Asset) 1% Decrease Current Discount Rate 1% Increase
As of June 30, 2019 (3.75%) (4.75%) (5.75%)
JSND $ (24,292,823) $ (31,006,306) $ (36,982,989)
Net Pension Liability (Asset) 1% Decrease Current Discount Rate 1% Increase
As of June 30, 2019 (6.75%) (7.75%) (8.75%)
TFFR $ 1,859,994,289 $ 1,377,253,104 $ 976,082,834
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STATE OF NORTH DAKOTA
D. SINGLE EMPLOYER PENSION PLANS
Below are the changes in net pension liability for the State’s (primary government) single-employer plans:
Single-employer Plans
Changes in Net Pension Liability
Increases (Decreases)
For the Year June 30, 2019*
JSND NDHPRS
Total pension liability (asset)
Service cost $ 80,344 $ 2,738,268
Interest 3,500,344 7,203,350
Change of benefit terms - -
Diff erence betw een expected and actual experience (310,124) (621,359)
Changes of assumptions 5,811,755 -
Benef it payments, including refund of employee
contributions (4,582,577) (4,981,377)
Net change in total pension liability (asset) 4,499,742 4,338,882
Total pension liability (asset) - beginning 63,629,469 94,047,078
Total pension liability (asset) - ending (a) $ 68,129,211 $ 98,385,960
Plan fiduciary net position
Contributions - employer $ - $ 2,152,970
Contributions - employee 32,987 1,453,533
Contributions - service credit repurchase - 281,573
Contributions - other - -
Net investment income 2,918,585 6,716,338
Benef it payments, including refund of employee
contributions (4,582,577) (4,981,377)
Administrative expense (46,295) (30,353)
Net change in plan fiduciary net position (1,677,300) 5,592,684
Plan f iduciary net position - beginning 97,265,411 73,336,316
Plan f iduciary net position - ending (b) $ 95,588,111 $ 78,929,000
Net pension liability (asset) - ending (a) - (b) $ (27,458,900) $ 19,456,960
Plan fiduciary net position as a percentage of the
total pension liability (asset) 140.30% 80.22%
Covered employee payroll $ 416,652 $ 10,737,297
Plan net pension liability (asset) as a percentage of
covered employee payroll -6590.37% 181.21%
*The 2019 information presented has a measurement date of June 30, 2018.
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STATE OF NORTH DAKOTA
JOB SERVICE NORTH DAKOTA (JSND)
Net Pension Asset
At June 30, 2019, the State recorded a net pension asset of $27,458,900 for all of the Job Service North Dakota pension
plan. The net pension asset was measured as of June 30, 2018 and the total pension asset used to calculate the net
pension asset was determined by an actuarial valuation as of that date.
Deferred Inflows and Outflows of Resources
For the year ended June 30, 2019 the State recognized pension expense of $4,706,520. At June 30, 2019 the State
reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Primary Government Discrete Component Units
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and actual
experience $ - $ - $ - $ -
Changes of assumptions - - - -
Net difference between projected and actual
earnings on pension plan investments 4,385,421 - - -
Changes in proportion and differences
between employer contributions and
proportionate share of contributions - - - -
Employer contributions subsequent to the
measurement date - - - -
Total $ 4,385,421 $ - $ - $ -
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended June 30:
Primary Government Component Units
2020 $ 1,993,919 $ -
2021 1,120,271 -
2022 771,955 -
2023 499,276 -
Total $ 4,385,421 $ -
Sensitivity of the State's Proportionate Share of the Net Pension Asset to Changes in the Discount Rate
The following presents the State's proportionate share of the net pension asset calculated using the discount rate of 4.75
percent, as well as what the State's proportionate share of the net pension liability would be if it were calculated using a
discount rate that is 1-percentage-point lower (3.75 percent) or 1-percentage-point higher (5.75 percent) than the current
rate:
1% Decrease Current Discount 1% Increase
(3.75%) Rate (4.75%) (5.75%)
State’s proportionate share of the
net pension asset $ (20,228,759) $ (27,458,900) $ (33,588,893)
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STATE OF NORTH DAKOTA
NORTH DAKOTA HIGHWAY PATROLMEN’S RETIREMENT SYSTEM (NDHPRS)
Net Pension Liability
At June 30, 2019, the State recorded a net pension liability of $19,456,960 for all of the North Dakota Highway
Patrolmen’s Retirement System pension plan. The net pension liability was measured as of June 30, 2018 and the total
pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date.
Deferred Inflows and Outflows of Resources
For the year ended June 30, 2019 the State recognized pension expense of $3,195,876. At June 30, 2019 the State
reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Primary Government Discrete Component Units
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and actual
experience $ 482,350 $ (588,441) $ - $ -
Changes of assumptions 3,215,897 - - -
Net difference between projected and actual
earnings on pension plan investments - (256,395) - -
Changes in proportion and differences
between employer contributions and
proportionate share of contributions - - - -
Employer contributions subsequent to the
measurement date 2,091,097 - - -
Total $ 5,789,344 $ (844,836) $ - $ -
$2,091,097 reported as deferred outflows of resources related to pensions resulting from State contributions subsequent
to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2020.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended June 30:
Primary Government Component Units
2020 $ 1,539,866 $ -
2021 992,841 -
2022 17,556 -
2023 359,233 -
2024 (34,678) -
Thereafter (21,407) -
Total $ 2,853,411 $ -
Sensitivity of the State's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the State's proportionate share of the net pension liability calculated using the discount rate of
7.75 percent, as well as what the State's proportionate share of the net pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the
current rate:
1% Decrease Current Discount 1% Increase
(6.75%) Rate (7.75%) (8.75%)
State’s proportionate share of the
net pension liability $ 32,041,790 $ 19,456,960 $ 8,997,526
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STATE OF NORTH DAKOTA
E. COST SHARING EMPLOYER PENSION PLANS
NORTH DAKOTA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Proportionate Share of Net Pension Liability
The North Dakota Public Employees' Retirement System (PERS) provides retirement benefits to employees of the
primary government and its discrete component units as well as to other political subdivision subdivisions (Main System).
It also covers Supreme and district court judges, the National Guard Security Officers and Firefighters, and as of August
1, 2003, peace officers and correctional officers employed by political subdivisions. Effective August 1, 2017, current and
newly eligible members of the National Guard System were transferred to the Law Enforcement System.
At June 30, 2019, the State recorded a net pension liability of $859,160,104 for all of the PERS system. The net pension
liability was measured as of June 30, 2018 and the total pension liability used to calculate the net pension liability was
determined by an actuarial valuation as of that date. The State's proportion of the net pension liability was based on the
State's share of covered payroll in the PERS pension plan relative to the covered payroll of all participating employers. At
June 30, 2018 the State's proportion was 50.3787 percent, which is an decrease of 1.5011 percent from the prior year.
The State’s discrete component unit, North Dakota Public Finance Authority, also participates in. At June 30, 2019, the
discrete component units recorded a net pension liability of $279,000 for all of the PERS system. The net pension liability
was measured as of June 30, 2018 and the total pension liability and asset used to calculate the net pension liability was
determined by an actuarial valuation as of that date. The discrete component units’ proportion of the net pension liability
was based on their share of covered payroll in the PERS pension plan relative to the covered payroll of all participating
employers. At June 30, 2018 the discrete component unit’s proportion was 0.01655 percent, which is an increase of
0.0003 percent from the prior year.
Deferred Inflows and Outflows of Resources
For the year ended June 30, 2019 the State recognized pension expense of $136,402,760 and the component unit
recognized pension expense of $44,000. At June 30, 2019 the State reported deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
Primary Government Discrete Component Units
Deferred Deferred Deferred
Outflows of Deferred Inflows Outflows of Inflows of
Resources of Resources Resources Resources
Differences between expected and
actual experience $ 2,602,369 $ (32,189,349) $ 1,000 $ (10,000)
Changes of assumptions 316,975,734 (12,634,626) 101,000 (4,000)
Net difference between projected and
actual earnings on pension plan
investments - (4,461,712) - (1,000)
Changes in proportion and differences
between employer contributions and
proportionate share of contributions 9,550,810 (31,532,267) 1,000 (6,000)
Employer contributions subsequent to
the measurement date 39,165,627 - 10,000 -
Total $ 368,294,540 $ (80,817,954) $ 113,000 $ (21,000)
$39,165,627 and $10,000 reported as deferred outflows of resources related to pensions resulting from State and
component unit contributions, respectively, subsequent to the measurement date will be recognized as a reduction of the
net pension liability in the year ended June 30, 2020.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended June 30:
Primary Government Component Units
2020 $ 82,916,014 $ 27,000
2021 71,473,057 23,000
2022 58,230,810 19,000
2023 33,405,549 12,000
2024 2,285,529 1,000
Total $ 248,310,959 $ 82,000
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STATE OF NORTH DAKOTA
Sensitivity of the State's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the State's proportionate share of the net pension liability calculated using the discount rate of
6.32 percent, as well as what the State's proportionate share of the net pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower (5.32 percent) or 1-percentage-point higher (7.32 percent) than the
current rate:
1% Decrease Current Discount 1% Increase
(5.32%) Rate (6.32%) (7.32%)
State’s proportionate share of the
net pension liability $ 1,174,961,646 $ 859,160,104 $ 595,594,274
Component’s proportionate share
of the net pension liability 380,000 279,000 196,000
NORTH DAKOTA TEACHERS’ FUND FOR RETIREMENT
Proportionate Share of Net Pension Liability
The North Dakota Teachers’ Fund for Retirement (TFFR) provides retirement benefits to North Dakota public teachers
and certain other teachers who meet various requirements. At June 30, 2019, the State recorded a net pension liability of
$8,874,047 for all of the TFFR. The net pension liability was measured as of June 30, 2018 and the total pension liability
used to calculate the net pension liability was determined by an actuarial valuation as of that date. The State's proportion
of the net pension liability was based on the State's share of covered payroll in the TFFR pension plan relative to the
covered payroll of all participating employers. At June 30, 2018 the State's proportion was 0.66579 percent, which is an
increase of 0.01285 percent from the prior year.
Deferred Inflows and Outflows of Resources
For the year ended June 30, 2019 the State recognized pension expense of $860,981. At June 30, 2019 the State
reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Primary Government Discrete Component Units
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and actual
experience $ 24,084 $ (241,349) $ - $ -
Changes of assumptions 488,856 - - -
Net difference between projected and actual
earnings on pension plan investments - (30,681) - -
Changes in proportion and differences
between employer contributions and
proportionate share of contributions 769,172 (519,700) - -
Employer contributions subsequent to the
measurement date 542,201 - - -
Total $ 1,824,313 $ (791,730) $ - $ -
$542,201 reported as deferred outflows of resources related to pensions resulting from State contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2020.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended June 30:
Primary Government Component Units
2020 $ 367,023 $ -
2021 242,971 -
2022 25,346 -
2023 (104,696) -
2024 (36,924) -
Thereafter (3,338) -
Total $ 490,382 $ -
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STATE OF NORTH DAKOTA
Sensitivity of the State's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the State's proportionate share of the net pension liability calculated using the discount rate of 8
percent, as well as what the State's proportionate share of the net pension liability would be if it were calculated using a
discount rate that is 1-percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the current
rate:
1% Decrease Current Discount 1% Increase
(6.75%) Rate (7.75%) (8.75%)
State’s proportionate share of the net
pension liability $ 11,982,530 $ 8,874,047 $ 6,288,754
F. PENSION SUMMARY
The following is a summary of the pension related items for all plans of the State as of and for the year ended June 30,
2019.
Deferred
Deferred Outflows Inflows of
Net Pension of Resources Net Pension Resources Pension
Pension Plan Asset Pension Liability Pension Expense
Job Service North Dakota $ 27,458,900 $ 4,385,421 $ - $ - $ 4,706,520
ND Highway Patrolmen’s
Retirement System - 5,789,344 19,456,960 844,836 3,195,876
ND Public Employees’
Retirement System - 368,294,540 859,160,104 80,817,954 136,402,760
ND Teachers’ Fund for
Retirement - 1,824,313 8,874,047 791,730 860,981
Total $ 27,458,900 $ 380,293,618 $ 887,491,111 $ 82,454,520 $ 145,166,137
G. DEFINED CONTRIBUTION PLAN
The North Dakota Defined Contribution Retirement Plan was established on January 1, 2000, and is administered in
accordance with chapter 54-52.6 of the North Dakota Century Code. The Defined Contribution Plan was available to
state employees who are in positions not classified by the Human Resource Management Services division of the State
of North Dakota. Employees under the judicial branch or the Board of Higher Education and State Institutional under
jurisdiction of the Board of Higher Education are not eligible to participate in the plan. The 2013 Legislative Assembly
passed legislation to expand eligibility to the plan to include all new state employees hired on or after October 1, 2013
through July 31, 2017. The Defined Contribution Plan had 99 participants as of June 30, 2019.
The administrative costs of the Defined Contribution Plan are funded by forfeitures of non-vested employee contributions
and administrative fees charged to individual participant accounts.
Benefits
Benefits are set by statute. Members are entitled to their vested account balance. A participating member is immediately
100% vested in the employee’s contributions. A participating member vests in the employer contributions made on the
member’s behalf as follows:
Upon completion of two years of service 50%
Upon completion of three years of service 75%
Upon completion of four years of service 100%
Members may elect to receive their account balance in a lump sum, lump sum direct rollover, or periodic distribution.
Death and Disability Benefits
Death and disability benefits are set by statute. Upon the death of a participating member or former participating
member, the vested account balance of that deceased participant is available to the participant’s designated
beneficiary(ies). A member who becomes totally and permanently disabled while employed by the State is eligible to
receive a distribution of the vested account balance. To qualify under this section, the member must meet the criteria
established by the System for being totally disabled.
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STATE OF NORTH DAKOTA
Contributions
Contributions are set by state statute and are a percentage of covered compensation. The State is paying 4% of the
member contribution. The member contribution rate is 7.00% and the employer rate is 7.12% for members first enrolled
prior to January 1, 2020. For members first enrolled after January 1, 2020 the member contribution rate is 7.00% and the
employer rate is 8.26%. Pension expense totaled $504,381 for the year ended June 30, 2019.
The Board, or vendors contracted by the Board, has exclusive authority to invest and manage the assets of the Defined
Contribution Retirement Plan. State statute allows each participating employee to direct the investment of the individual’s
employer and employee contributions and earnings to one or more investment options within the available categories of
investment as established by the Board.
H. TEACHERS’ INSURANCE ANNUITY ASSOCIATION
The Teachers’ Insurance and Annuity Association (TIAA-CREF), a privately-administered defined contribution retirement
plan, provides individual retirement fund contracts for eligible employees as defined by the Board of Higher Education in
its approved TIAA-CREF retirement resolution. Further information can be obtained by writing to TIAA-CREF, Denver
Regional Office, 1700 Broadway, Suite 770, Denver, Colorado 80290 or by calling 800-842-2009.
All benefits vest immediately to the participant. The plan requires employee and employer contributions be based on a
classification system and years of service based on the schedule shown below.
Employment Class Years Of Service By The Participant By The Institution Total
0 thru 10 4.50% 12.50% 17.00%
I and III
over 10 5.00% 13.00% 18.00%
0 thru 2 3.50% 7.50% 11.00%
II 3 thru 10 4.50% 12.50% 17.00%
over 10 5.00% 13.00% 18.00%
IV Closed to new participants 4.00% 12.00% 16.00%
President/Chancellor less than 3 0.00% 0.00% 0.00%
(additional employer 3 to less than 6 0.00% 4.00% 4.00%
contribution) 6 and over 0.00% 8.00% 8.00%
Plan contributions are made on a tax-deferred basis in accordance with section 414(h)(2) of the Internal Revenue Code.
All contributions are applied as premiums to retirement annuity contracts owned by the participant. The State has no
further liability once annual contributions are made. The State contributed $42.3 million to TIAA-CREF during the fiscal
year ending June 30, 2019.
NOTE 7 - POST-RETIREMENT
A. IMPLICIT SUBSIDY UNFUNDED PLAN
The Implicit Subsidy Unfunded Plan provides health insurance coverage to eligible retirees who are not eligible for
Medicare. The premiums for this coverage are set under North Dakota Century Code 54-52.1-02 as a percent of the
active member single and family plan rates and are paid by the retiree. The premiums for this coverage are not age-
rated. Currently, the premiums for this group do not cover the costs of the coverage; therefore, the costs of this group are
being subsidized through the active group rates. This subsidy is not funded in advance and there is no guarantee that the
subsidy for the 2017-19 biennium will continue in the future.
A retiree must be receiving a retirement allowance from PERS, ND TFFR or TIAA-CREF to be eligible for the retiree
health care coverage. Effective July 1, 2015, eligibility for this coverage is limited to employees who retired prior to July
2015 and/or former Legislators.
OPEB Liability
The total net OPEB liability of the plan as of June 30, 2019, determined using a June 30, 2018 measurement date is
$3,604,136.
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Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of June 30, 2018, using the following actuarial
assumptions:
Mortality Rates: RP-2014 using mortality scale MP-2017.
Withdrawal Rates: Rates of withdrawal from active service before retirement other than death, rates of disability and
expected retirement ages developed on the basis of an investigation of actual plan experience.
Interest Rate: 6.56% per annum, net of investment expense
Inflation: 3% per annum
Expenses: Prior year expense, adjusted for inflation
B. RETIREE HEALTH INSURANCE CREDIT – PLAN INFORMATION
The Retiree Health Insurance Credit Fund, a cost-sharing multiple-employer other post-employment plan, is administered
by the North Dakota Retirement Board (the Board) to provide members that were first enrolled in the plan prior to
January 1, 2020 and are receiving retirement benefits from the Public Employees Retirement System, the Highway
Patrolmen's Retirement System and judges retired under Chapter 27-17 of the North Dakota Century Code a credit
toward their monthly health insurance premium under the state health plan based upon the member's years of credited
service. Effective July 1, 2015, the credit will also be available to apply towards monthly premiums under the state dental,
vision and long term care plan and any other health insurance. Effective August 1, 2019, the credit is expanded to also
include any dental, vision, and long term care plan. The Retiree Health Insurance Credit Fund is advance-funded on an
actuarially determined basis.
Regular employees hired under the Retirement Plan for Employees of Job Service North Dakota prior to October 1, 1980
are eligible to participate in the Retiree Health Insurance Credit Fund, a cost-sharing multiple-employer plan, as
administered by the Public Employees Retirement Board. The retired employee is provided a credit toward their monthly
health insurance premium under a qualifying plan based upon their years of credited service. In accordance with NDCC
54-52.1-03.2, Job Service North Dakota reimburses the Retiree Health Insurance Credit Fund monthly for credit received
by members of the retirement plan established by Job Service North Dakota.
Responsibility for administration of the NDPERS defined benefit OPEB plan is assigned to a Board comprised of nine
members. The Board consists of a Chairman, who is appointed by the Governor; one member appointed by the Attorney
General; one member appointed by the State Health Officer; three members elected by the active membership of the
NDPERS system, one member elected by the retired public employees and two members of the legislative assembly
appointed by the chairman of the legislative management.
Employee membership is as follows:
Retirees receiving benefit 12,471
Active participants 23,997
Total Membership 36,468
OPEB Contributions
The employer contribution for the PERS, the HPRS and the Defined Contribution Plan is set by statute at 1.14% of
covered compensation. Employees participating in the retirement plan as part-time/temporary members are required to
contribute 1.14% of their covered compensation to the Retiree Health Insurance Credit Fund. Employees purchasing
previous service credit are also required to make an employee contribution to the Fund. The benefit amount applied each
year is shown as "prefunded credit applied" on the Statement of Changes in Plan Net Position for the OPEB trust funds.
OPEB Benefits
Retiree health insurance credit benefits and death and disability benefits are set by state statute. There are no provisions
or policies with respect to automatic and ad hoc post-retirement benefit increases. Employees who are receiving monthly
retirement benefits from the Public Employees Retirement System, the Highway Patrolmen's Retirement System, or the
Defined Contribution Retirement Plan, the Chapter 27-17 judges or an employee receiving disability benefits, or the
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spouse of a deceased annuitant receiving the surviving spouse benefit of if the member selected a joint and survivor
option are eligible to receive credit toward their monthly health insurance premium under the state health plan.
The benefits are equal to $5.00 for each of the employee's , or deceased employee’s years of credited service not to
exceed the premium in effect for selected coverage. The retiree health benefit is also available for early retirement with
reduced benefits.
Net OPEB Liability of the Plan
The components of the net OPEB liability of the plan at June 30, 2019 is as follows (expressed in thousands):
RHIC
Total OPEB liability $ 217,831
Plan fiduciary net position (137,512)
Net OPEB liability (asset) $ 80,319
RHIC fiduciary net position as a
percentage of the total OPEB liability 63.13%
Actuarial Assumptions
Actuarial Cost Method: Entry Age Normal
Asset Valuation Method: Plan Fiduciary Net Position (Market value of assets, no asset smoothing)
RHIC Inflation: 2.50%
Salary Increase: Not applicable
Investment Rate of Return: 7.25%, net of investments expense, including inflation.
Mortality Rates: Mortality rates for active members, inactive members and healthy retirees were based on the RP-2000
Combined Healthy Mortality Table set back two years for males and three years for females, projected generationally
using the SSA 2014 Intermediate Cost scale from 2014. For disabled retirees, mortality rates were based on the RP-
2000 Disabled Retiree Mortality Table set back one year for males (not setback for females), multiplied by 125%.
Other Notes: Beginning January 1, 2020, members first enrolled in the NDPERS Main System and the Defined
Contribution Plan on or after that date will not be eligible to participate in RHIC. Therefore, RHIC will become for the most
part a closed plan. There were no benefit changes during the year.
The economic assumptions (excluding salary increases) and the asset smoothing method were updated beginning with
the actuarial valuation as of July 1, 2017 based on a review performed by GRS. The investment return assumption was
decreased from 7.50% to 7.25% beginning with the actuarial valuation as of July 1, 2019. All other actuarial valuations
were adopted by the Board based on an experience study covering the period July 1, 2009 through June 30, 2014.
The employer rate to the System is the statutory contribution rate of 1.14% of payroll.
Investment Rate of Return
The long-term expected investment rate of return assumption for the RHIC fund was determined using a building-block
method in which best-estimates ranges of expected future real rates of return (expected returns, net of RHIC investment
expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and
by adding expected inflation. Estimates of arithmetic real rates of return, for each major asset class included in the
RHIC’s target asset allocation as of July 1, 2019 is summarized in the following table:
Long-Term
Expected Real
Asset Class Rate of Return
Large Cap Domestic Equities 6.00%
Small Cap Domestic Equities 7.30%
International equities 6.95%
Core-Plus Fixed Income 2.07%
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Discount Rate
The discount rate used to measure the total OPEB liability was 7.25%. The projection of cash flows used to determine
the discount rate assumed plan member and statutory/Board approved employer contributions will be made at rates
equal to those based on the July 1, 2019 HPRS actuarial valuation reports. For this purpose, only employer contributions
that are intended to fund benefits of current RHIC members and their beneficiaries are included. Projected employer
contributions that are intended to fund the service costs of future plan members and their beneficiaries are not included.
Based on those assumptions, the RHIC fiduciary net position was projected to be sufficient to make all projected future
benefit payments of current plan members. Therefore, the long term expected rate of return on RHIC investments was
applied to all periods of projected benefit payments to determine the total OPEB liability.
Sensitivity of Net OPEB Liability
The following presents the net OPEB liability of the Plans as of June 30, 2019, calculated using the single discount rate
of 7.25%, as well as what the RHIC net OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower or 1-percentage-point higher than the current rate:
Current Discount
Net OPEB Liability (Asset) 1% Decrease Rate 1% Increase
As of June 30, 2019 (6.25%) (7.25%) (8.25%)
RHIC $ 102,516,136 $ 80,318,738 $ 61,317,668
The benefit provided by the North Dakota Retiree Health Insurance Credit Fund is a fixed dollar subsidy and is not
affected by healthcare cost trend. Therefore, a healthcare trend rate was not performed.
C. RETIREE HEALTH INSURANCE CREDIT – STATE’S SHARE
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
Proportionate Share of Net OPEB Liability
At June 30, 2019, the State reported a liability of $39,954,215 for its proportionate share of the net OPEB liability. The net
OPEB liability was measured as of June 30, 2018, and the total OPEB liability used to calculate the net OPEB liability
was determined by an actuarial valuation as of that date. The State’s proportion of the net OPEB liability was based on
the State's share of covered payroll in the OPEB plan relative to the covered payroll of all participating OPEB employers.
At June 30, 2018, the State's proportion was 50.731122 percent, which is a decrease of 0.814717 percent from the prior
year.
Deferred Inflows and Outflows of Resources
For the year ended June 30, 2019 the State recognized OPEB expense of $4,823,458. At June 30, 2019, the State
reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Primary Government Discrete Component Units
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and
actual experience $ 1,194,625 $ (826,631) $ - $ -
Changes of assumptions 3,281,357 (13,235) - -
Net difference between projected and
actual earnings on OPEB plan
investments - (848,561) - -
Changes in proportion and differences
between employer contributions and
proportionate share of contributions 248,071 (1,071,456) - -
Employer contributions subsequent to
the measurement date 6,362,621 - - -
Total $ 11,086,674 $ (2,759,883) $ - $ -
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$6,362,621 reported as deferred outflows of resources related to OPEB resulting from State contributions subsequent to
the measurement date will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2020.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEBs will be
recognized in OPEB expense as follows:
Year ended June 30:
Primary Government Component Units
2020 $ 138,742 $ -
2021 138,742 -
2022 138,742 -
2023 241,891 -
2024 600,348 -
Thereafter 705,705 -
Total $ 1,964,170 $ -
Sensitivity of the State's Proportionate Share of the OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the Plans as of June 30, 2019, calculated using the discount rate of
7.50%, as well as what the RHIC net OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (6.5 percent) or 1-percentage-point higher (8.5 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(6.5%) Rate (7.5%) (8.5%)
State’s proportionate share of the net OPEB liability $ 50,163,026 $ 39,954,215 $ 31,204,243
D. JOB SERVICE NORTH DAKOTA – MET LIFE INSURANCE BENEFIT
MET LIFE INSURANCE BENEFIT
Job Service North Dakota engaged an actuary to determine the Agency’s liability for post-employment benefits other than
pensions as of July 1, 2019. The actuary determined the net OPEB liability, deferred outflows of resources and deferred
inflows of resources related to OPEB, and OPEB expense the Agency has to record as of June 30, 2019. Requests to
obtain or review the actuary report should be addressed to the Finance Manager – P.O. Box 5507 Bismarck, North
Dakota, 58506-5507.
Plan Description
Job Service North Dakota employees who had a Met Life Insurance policy in effect on December 1, 1999, when the Met
Life Insurance benefit plan, a single-employer plan, was discontinued for new employees, receive the following benefits:
Job Service North Dakota pays 33% of the monthly Basic Met Life Insurance premium of current employees with a Met
Life Insurance policy and upon retirement the employees Basic Met Life Insurance premiums are covered 100% by Job
Service North Dakota. The Basic Life Insurance Benefits are equal to the employees’ annual salary rounded up to the
nearest thousand plus two thousand up to a maximum of $45,000 and are decreased at a rate of 2% per month at age
65 until the benefit is 25% of the original amount but no less than $10,000. The actuary report of the Met Life Insurance
Benefit is the only financial report produced for this benefit and is available as indicated above. Job Service North Dakota
has authority to change the funding and benefit policy of this plan.
Membership of the Other Post Retirement Benefit plan consisted of the following at July 1, 2018, the date of the latest
actuarial valuation:
Retirees and beneficiaries currently receiving benefits 169
Terminated employees entitled to benefits but not yet receiving them 0
Current vested employees 14
Total 183
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OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
The Employer reported a liability of $1,452,692 at June 30, 2019 for its net OPEB liability. The net OPEB liability was
measured as of July 1, 2019, and the total OPEB liability used to calculate the net OPEB liability was determined by an
actuarial valuation as of that date.
For the year ended June 30, 2019, the Employer recognized OPEB expense of $45,710. The Employer reported deferred
outflows of resources and deferred inflows of resources related to OPEB from the following:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual
experience $ - $ -
Changes of assumptions - -
Net difference between projected and actual
earnings on OPEB plan investments - -
Changes in proportion and differences between
employer contributions and proportionate
share of contributions 4,182 -
Total $ 4,182 $ -
Actuarial Assumptions
The total OPEB liability in the actuarial valuation was determined using the following actuarial assumptions, applied to all
periods included in the measurement:
July 1, 2019
Inflation none
Salary increases 5%
Discount rate 2.98% per annum
Mortality rates were based on the RP-2014 Total Dataset Mortality Table adjusted to based year 2006, projected with
Scale MP-2017.
Sensitivity of the State’s Proportionate Share of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the Plans as of June 30, 2019, calculated using the discount rate of
2.98%, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-
point lower (1.98 percent) or 1-percentage-point higher (3.98 percent) than the current rate:
Current Discount
Net OPEB Liability 1% Decrease Rate 1% Increase
As of June 30, 2019 (1.98%) (2.98%) (3.98%)
Met Life $ 1,633,126 $ 1,452,692 $ 1,302,885
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Schedule of Changes in Net OPEB Liability
Increase (Decrease)
Total OPEB Plan Net Net OPEB
Liability Position Liability
(a) (b) (a) - (b)
Balances at 6/30/18 $ 1,490,632 $ - $ 1,490,632
Changes for the Year:
Service cost 3,672 - 3,672
Interest 42,038 - 42,038
Benefit changes - - -
Experience losses (gains) - - -
Changes of assumptions - - -
Contributions - Employer 83,650 (83,650)
Benefits paid (83,650) (83,650) -
Administrative expenses - - -
Net changes (37,940) - (37,940)
Balances at 6/30/19 $ 1,452,692 $ - $ 1,452,692
The plan provisions used in the measurement of the net OPEB liability are the same as those used in the Actuarial
Valuation as of July 1, 2018.
E. OPEB SUMMARY
The following is a summary of the OPEB related items for all plans of the State as of and for the year ended June 30,
2019.
Deferred
Deferred Outflows Inflows of
of Resources - Net OPEB Resources - OPEB
OPEB Plan OPEB Liability OPEB Expense
ND Public Employees’
Retirement System $ 11,086,674 $ 39,954,215 $ 2,759,883 $ 4,823,458
JSND Met Life Insurance
Benefit 4,182 1,452,692 - 45,710
Total $ 11,090,856 $ 41,406,907 $ 2,759,883 $ 4,869,168
NOTE 8 - DEFERRED COMPENSATION PLAN
The ND Public Employees Retirement System was given authority by Chapter 54-52.2 to administer an employee
deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan allows employees of the
State of North Dakota or any of its political subdivisions, institutions, departments, or agencies to participate, providing
that the employee has signed a participation agreement, which permits them to defer a portion of their current salary until
future years. Each participant may defer the lessor of $19,000 or 100% of gross annual compensation for calendar year
2019. Participation in the plan is optional. The deferred compensation is not available to the employees until termination,
retirement, death or unforeseeable emergency.
All compensation deferred under the plans, all property and rights purchased with those amounts, and all income
attributable to those amounts, property or rights, are held in trust for the exclusive use of the employee or their
beneficiary.
The minimum monthly member contribution to the deferred compensation plan is $25 and the maximum vesting in the
employer contributions ranges from 1% to 4% of the monthly salary, or $25, depending the employees months of service.
The related assets of the plan, held in trust, are reported at fair value as follows (expressed in thousands):
Plan Participation By:
State of North Dakota $ 108,758 86%
Other Jurisdictions 17,635 14%
Total Value $ 126,393 100%
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The deferred compensation plan had 12,934 participants as of June 30, 2019.
NOTE 9 - PERS UNIFORM GROUP INSURANCE PROGRAM
The PERS Uniform Group Insurance Program, an enterprise fund, contracts with Sanford Health Plan to provide health
care insurance to the employees of the State of North Dakota, or any of its political subdivision, institutions, departments
or agencies. The contract for the 2017-2019 biennium provides for an accounting of premiums paid and claims incurred
during the biennium. The final gain or loss is determined two years after the end of the biennium, which for the 2017-
2019 biennium will occur in 2021. In the event of a loss, the system does not have any risk.
The System again entered into a similar contract with Sanford Health Plan for the 2019-2021 biennium. The contract for
the 2019-2021 biennium provides for an accounting of premiums paid and claims incurred during the biennium. The final
gain or loss is determined two years after the end of the biennium, which for the 2019-2021 biennium will occur in 2023.
In the event of a loss, the system does not have any risk. No other insurance contracts have a gain sharing provision.
NOTE 10 - SEGMENT INFORMATION
North Dakota Housing Finance Agency maintains two separate funds which account for general agency operations and
provide loans to finance construction of rental residential housing and single-family ownership. The two funds are
accounted for in a single fund, but investors in home ownership bonds rely solely on the revenue generated by the
mortgage loans and assets acquired for repayment. Segment information for the year ended June 30, 2019, was as
follows (expressed in thousands):
Home-Ownership Bond
Funds
Condensed Statement of Net Position
Current assets – other $ 262,372
Noncurrent assets – other 1,207,583
Total Assets 1,469,955
Deferred outflow of resources 7,886
Current liabilities – other 72,717
Noncurrent liabilities – other 1,221,211
Total Liabilities 1,293,928
Net position – restricted 183,913
Total Net Position $ 183,913
Condensed Statement of Revenues, Expenses and Change in Fund Net Position
Operating revenues $ 46,167
Operating expenses (36,115)
Operating income 10,052
Change in net position 10,052
Total net position, beginning of year, restated 173,892
Equity transfer out (31)
Total net position, end of year $ 183,913
Condensed Statement of Cash Flows
Net cash used by operating activities $ (201,611)
Net cash used for noncapital financing activities 267,010
Net cash from investing activities (22,204)
Net change in cash and cash equivalents 43,195
Cash and cash equivalents, beginning of year 170,531
Cash and cash equivalents, end of year $ 213,726
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NOTE 11 - MAJOR COMPONENT UNIT TRANSACTIONS
BISMARCK STATE COLLEGE AND BISMARCK STATE COLLEGE FOUNDATION
On January 25, 2007, BSC and BSC Foundation entered into a 15-year lease agreement to facilitate the construction of
a Mechanical Maintenance building. Under the agreement, BSC is responsible for payment of all rent, maintenance, and
repair of the facility, maintenance of all insurance required under the lease, and restrictions of use of the facility as set
forth in the lease. The amount of the rent is tied to the $1.4 million debt service retirement. Upon payment of all the
bonds, BSC will have the option to purchase the premises for $100. On August 15, 2013, an addendum was made to the
lease agreement to facilitate an addition to the facility.
On October 19, 2007, BSC and BSC Foundation entered into a 25-year lease agreement to facilitate the construction of
the National Energy Center of Excellence building. Under the agreement, BSC is responsible for payment of all rent,
maintenance, and repair of the facility, maintenance of all insurance required under the lease, and restrictions of use of
the facility as set forth in the lease. The amount of the rent is tied to the $5.0 million debt service retirement. Upon
payment of all the bonds, BSC will have the option to purchase the premises for $100.
BSC Foundation’s financial statements include these transactions as a receivable from BSC and a long-term liability.
BSC’s financial statements include the capitalized asset and a long-term liability due to BSC Foundation.
BSC BSC Foundation
NECE Building $ 9,548,989 $ 10,846,116
Accumulated Depreciation (2,920,019) (2,920,019)
Net Value of NECE Building $ 6,628,970 $ 7,926,097
On September 26, 2014, BSC and Student Housing, LLC (a wholly owned subsidiary of BSC Foundation) entered into a
30-year Ground Lease to facilitate the construction and development of a student apartment housing complex on
approximately 4.67 acres of land owned by BSC. Under the agreement, BSC would enter into a separate operating and
lease agreement with LLC for the constructed student housing apartment complex for use as a College student housing
facility. There are no separate rent payments to be paid by LLC during the term of the Ground Lease agreement in
exchange for use of the land.
On October 14, 2014, BSC and Student Housing, LLC (a wholly owned subsidiary of BSC Foundation) entered into a
Memorandum of Understanding (MOU) which sets forth the essential terms of an Apartment Master Lease agreement to
be entered into between LLC and BSC, under which LLC will lease to BSC space in the student housing complex to be
constructed by LLC on BSC property according to the terms and conditions of the Ground Lease. The 5-year renewable
Apartment Master Lease Agreement will address quarterly rent payments by BSC and responsibilities for maintenance,
repairs and insurance of the facilities and improvements during the term of the lease.
On August 13, 2015, BSC and Student Housing, LLC entered into a 5-year lease agreement to operate student housing
services in the two newly constructed housing units (Ritchie Hall and Gate City Bank Hall). Under the agreement, BSC is
responsible for payment of all rent, maintenance, and daily repair/maintenance of the facility, and restrictions of use of
the facility as set forth in the lease. Student Housing, LLC is responsible for major repairs/maintenance and property and
liability insurance on the facilities. The lease is classified as an operating lease on BSC financial statements and Student
Housing, LLC financial statements includes the capitalized asset.
In fiscal year 2019, BSC purchased a building located in Bismarck, North Dakota from the BSC foundation for $8.2
million. The building will house the BSC nursing school.
As of July 1, 2018, the BSC Foundation gained control of the Bismarck State College National Alumni Association. The
BSC Alumni Association financial statements are included in the consolidated financial statements of the Major University
System Foundation component units. The change in reporting entity has been applied retroactively to the July 1, 2018
beginning net assets.
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DICKINSON STATE UNIVERSITY AND DICKINSON STATE UNIVERSITY FOUNDATION
Arbitration - The Dickinson State University Foundation (DSUF) has ownership interest and/or management
responsibilities in various real estate projects by way of its membership in Dickinson Investments, LLC (Dickinson
Investments) and other entities. DSUF is involved in a dispute with another member of Dickinson Investments, Granville
Brinkman and other Brinkman entities (Respondent). An arbitration claim was filed on December 26, 2013. On
September 30, 2014, the arbitrator awarded the Respondent a buy-out of their equity interest in the amount of $1.260
million. The Respondent was also awarded repayment of a note, prejudgment interest and attorneys’ fees and costs.
DSUF and Dickinson Investments are jointly and severally liable for the buyout amount.
On October 28, 2014, the arbitrator issued a final arbitration award and ordered:
a) prejudgment interest at 6% would commence December 26, 2013,
b) the amount of attorney fees and costs to be repaid was $233,420,
c) the note prepayment amount was $133,600
d) the parties shared responsibility for arbitration fees and expenses totaling $67,620.
The final award exceeds $1.7 million. Although DSUF has an equity interest of about 6 percent in Dickinson Investments,
the arbitrator has ruled that it is jointly and severally liable for the entire award, except the $133,600 loan for which
Dickinson Investments is responsible.
Receivership - At the request of the NDUS Chancellor, on November 21, 2014, the North Dakota Attorney General
petitioned the state district court for the appointment of a receiver. On December 3, 2014, the court appointed a receiver
for DSUF. The court order included the following directives:
x The receiver shall take immediate possession, custody, and control of all assets owned or held by DSUF;
x The DSUF board of directors shall be temporarily suspended and have no authority to act on behalf of DSUF;
x The receiver shall gather, protect and oversee DSUF’s corporate and charitable assets;
x The receiver shall report to the court; and
x The receiver shall have all the authority necessary to continue the day-to-day activities of the DSUF.
The receiver filed interim reports on a regular basis through September 2016. In the seventh interim report, dated August
31, 2015, the receiver recommended that DSUF be dissolved. This recommendation was based on an inability to
negotiate a mutually acceptable settlement of the outstanding Brinkman judgment against DSUF. The report indicates
that dissolution should foremost prioritize DSUF obligations to honor restrictions placed on DSUF assets by donors, then
address claims made by creditors, employees, and other interested parties. However, DSUF accounting reports indicated
that the foundation had total net restricted assets in an amount less than total permanently and temporarily restricted
donations.
The Office of Attorney General requested the commencement of dissolution for DSUF. On August 30, 2017, Stark
County District Court Judge William Herauf issued an Order that, in part, approved a settlement reached between the
Attorney General and the DSUF’s major creditors. The Order also resolved all claims against the DSUF, allowing for the
distribution of assets and final closure of the issues surrounding the DSUF.
On June 20, 2017, a settlement agreement was signed by the SBHE, DSU and five financial institutions whereby an
amount of $3.1 million will be paid to the financial institutions to repay the outstanding debt related to the Biesiot Activities
Center. The 2017 North Dakota Legislative Assembly provided an appropriation to Dickinson State University for the
settlement amount. The settlement was paid in July 2017 consistent with the terms of the settlement agreement.
DSUF’s Restated Articles of Incorporation state that upon dissolution, remaining assets shall be distributed to the SBHE
for the exclusive use and benefit of the Dickinson State University or its direct successors in interest. The receiver
recommended that all remaining net assets of DSUF be directed to be turned over to a new 501(c)(3) tax-exempt
Foundation in keeping with DSUF’s Restated Articles of Incorporation.
There is a cash reserve account remaining in excess of $300,000 pending the outcomes of resolving claims from the
U.S. Internal Revenue Service relating to Charitable Remainder Trusts. All tax returns have been filed by the court
appointed Receiver. The U.S. Internal Revenue Service has approved one of the returns and the remainder of the
returns are pending review. Once all returns are approved, any remaining cash will be distributed to the DSU Heritage
Foundation and a final Receiver’s report will be filed to obtain Court approval of the final distribution and closing the
receivership dissolution action.
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Financial Audit
In fiscal year 2013, The DSUF’s independent auditors issued a qualified opinion on the DSUF financial statements
because they were unable to form an opinion regarding the proper amount and classification of unrestricted and
temporarily restricted net assets. In fiscal year 2014, the DSUF’s independent auditors were unable to issue an audit
opinion on the DSUF financial statements as a result of the aforementioned arbitration and the overall condition of the
DSUF financial records. An audit has not performed since fiscal year 2014.
Additionally, it has been reported that DSUF may have used endowment funds as collateral to obtain financing and to
meet monthly operating expenses of the foundation and one of its real estate projects.
NORTH DAKOTA STATE UNIVERSITY AND NDSU RESEARCH AND TECHNOLOGY PARK, INC.
On December 30, 1999, North Dakota State University (NDSU), through the State of North Dakota and North Dakota
State Board of Higher Education, entered into a ground lease, whereby the NDSU Research and Technology Park
(RTP), Inc. (component unit) leases 40 acres of land for $1 per year for the next seventy-five years.
On July 1, 2002, NDSU and the RTP entered into an agreement for cooperation and assistance between entities. The
agreement is an annual agreement, which automatically extends for one-year periods unless cancelled by either party to
the agreement.
During fiscal year 2017, NDSU and the RTP entered into renewed agreements, whereby NDSU leases the Research
Buildings #1 and #2 through June 30, 2032. During fiscal year 2019, total annual rent of $312,000 was paid by NDSU for
these two buildings, in addition to the $1.8 million of principal and interest paid by NDSU directly to the bond trustee.
NDSU reimbursed the RTP $30,556 for property insurance on the two buildings and directly pays the utility costs under
these agreements. The annual rent will be re-adjusted by mutual agreement every two years. These agreements are
subject to funding and legislative appropriations.
NDSU FOUNDATION
Fargodome Lease and Improvements
In fiscal year 2006, the Foundation financed the construction and equipping of office space, locker rooms, meetings
rooms, and related facilities in the Fargodome for use by NDSU through the sale of revenue bonds issued by Cass
County. The Foundation has leased the space in the Fargodome from the City of Fargo and subleased the space,
furniture, fixtures and equipment to NDSU. Under the agreement, NDSU will pay rent to the NDSUFAA for use of the
premises. The amount of the rent is tied to the $3.5 million debt service retirement plus the Fargodome annual space rent
and all costs incurred by the Foundation incident to the lease, less any contributions received by the Foundation for the
project. Under this agreement in fiscal year 2019, the Foundation paid the debt service and other fees on behalf of NDSU
in the amount of $331,606.
The facility is included in long-term investments and the debt is included in long-term liabilities on the financial reports of
the Foundation. NDSU has also recorded a capital asset and a capital lease payable, reflected as “Due to Component
Units” by NDSU, of $443,947 as of June 30, 2019. Since the foundation is a discretely presented component unit of the
University System and the component unit and the University System are reporting the same assets and debt for the
Fargodome improvements, a reclassification entry was made to ending balances in the component unit consolidating
financial statements to show the appropriate due from primary institution.
Renaissance Hall
The former Northern School Supply building was donated to the Foundation by NDSU alum in December of 2001. During
fiscal year 2003 and 2004, the Foundation renovated the building with the intent to lease the facility to NDSU beginning
fall 2004. The Foundation transferred nearly the entire ownership of the building to 650 NP Avenue, LLC and Kilbourne
Design Group, LLC, for a five-year period in order to achieve tax credits that would ultimately reduce the cost of the
building to NDSU. During the five-year tax credit period, NDSU leased the building from the two LLCs, with the lease
payments composed of interest and fees. With the five-year tax credit period ending December 31, 2010 (as extended),
and the ownership was transferred back to the Foundation, permanent financing was put in place on December 17, 2010,
with the issuance of $5.65 million of 20-year University Facilities Lease Revenue Bonds, Series 2010 (Renaissance Hall
Project). The financing structure involving the five-year temporary ownership transfer resulted in achieving tax credits of
$4.9 million which directly lowered the leasing cost to NDSU.
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Under this refinanced debt issuance and lease agreement, as approved by the SBHE on December 16, 2010, the
property is leased to NDSU for rent equal to the semi-annual principal and interest on the bonds, plus all costs incurred
by the Foundation incident to ownership of the property. Ownership of the property will transfer to NDSU when the bonds
are repaid in full. NDSU paid the Foundation $412,000 in fiscal year 2019 for debt service under this agreement. As of
June 30, 2019 the outstanding balance on the bonds, reflected as “Due to Component Units” by NDSU, is $3.8 million.
Barry Hall Business Building and Klai Hall Architecture Building
Effective November 28, 2007, NDSU and the Foundation entered into lease agreements for two buildings in downtown
Fargo, formerly known as the "Pioneer Mutual Building" and "Lincoln Mutual building". The Foundation financed the
construction of the Barry Hall business building and Klai Hall architecture building projects through the sale of $18.52
million of 20-year University Facilities Revenue Bonds issue by the City of Fargo, North Dakota. The City has loaned the
bond proceeds to the Foundation for payments equal to the sum of the semi-annual interest payments and installments
of varying principal amounts on the variable rate bonds and the semi-annual principal and interest payments on the fixed-
rate bonds. The principal payments on the variable rate bonds will be funded from payments on donor pledges restricted
for the project. Under the terms of the loan, the Foundation is responsible for the real estate taxes, insurance, repairs and
maintenance, and other costs incident to ownership of the property. The property is included with property in the financial
statements and the bonds have been recorded as a direct obligation of the Foundation. Ownership of the property will
transfer to NDSU when the bonds are repaid in full. The bonds are guaranteed by the Foundation. This property is leased
to NDSU for rental equal to the sum of the semi-annual interest only payments on the variable term bonds plus the semi-
annual principal and interest payments on the fixed-rate bonds for the term of the bonds, plus all the costs incurred by
the Foundation incident to ownership of the property.
In May 2012, the Foundation refinanced the original bonds issued in November 2007. As a result, new leases were
executed. Under the terms of the new leases, NDSU pays and recognizes a liability for entire amount of the previously
issued bonds. During fiscal year 2019, NDSU paid $774,000 to the bond trustee on-behalf of the Foundation under the
new leases for debt service on Barry Hall & Klai Hall. NDSU has an option to acquire the property upon full payment of
the bonds. As of June 30, 2019, the outstanding balance on the bonds, reflected as “Due to Component Units” by NDSU,
is $8.65 million.
Other Transactions
The Foundation provides meeting space rental and database support service to NDSU for an annually negotiated fee.
NDSU paid the foundation $679,000 for the fiscal year ending December 31, 2018.
In addition to the debt service payments on the Fargodome, Renaissance, Barry and Klai Halls, NDSU reimburses the
Foundation for other operating expenses related to those buildings, such as property insurance, flood insurance, boiler
inspection fees, real estate taxes and bond administrative fees. Those costs totaled $104,000 during the fiscal year
ending December 31, 2018.
The Foundation’s fiscal year end is December 31, NDSU year end is June 30. Timing differences in amounts may occur
between entity financial statements, due to different year end dates.
UNIVERSITY OF NORTH DAKOTA AND UND AEROSPACE FOUNDATION
The UND Aerospace Foundation (UND AF) recorded expenses reimbursed to UND for salaries, building rent, aircraft
rental, and goods and services under an operating agreement aggregating $13.9 million in fiscal year 2019. This
operating agreement has no specific term and is intended to memorialize various operating agreements, rate structures,
duties, and obligations each party has to the other. Expenses reimbursed to UND represent actual costs incurred and are
included in training expenses in the consolidated statements of activities.
The UND AF recorded revenue for service and hangar, CRJ, 360-degree tower, and aircraft rental to UND of $3.9 million
in fiscal year 2019, which is included in program and event revenue in the Statement of Revenue, Expenses and
Changes in Fund Net Assets for Component Units (FASB Basis) – University System Foundation.
As of June 30, 2019, the UND AF had recorded accounts payable to UND of $2.3 million for reimbursable costs and
services. As of June 30, 2019, the UND AF had recorded accounts receivable from UND of approximately $813,000,
which are included in accounts receivable in the statement of net assets for component units (FASB Basis) – University
System Foundation.
The UND AF entered into a sublease with UND to lease the aircraft storage hangar/ground support equipment facility.
The lease term is for 20 years, commencing on July 7, 2003, until July 6, 2023. For the first fifteen years of the sublease,
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UND will pay the Foundation’s monthly minimum payment of $12,672, beginning on October 1, 2003, subject to actual
cost adjustments. At the end of the 15 years of the sublease, rent will be adjusted based upon the interest rate
adjustments of the debt incurred by the Foundation in the construction of the hangar. Under this noncancelable sublease
with UND, UND AF will receive future minimum rentals of $1.9 million over the next five years.
UNIVERSITY OF NORTH DAKOTA AND RE ARENA, INC.
RE Arena Inc. and UND, enter into an annual operating agreement from July 1, 2017 to June 30, 2020. The operating
agreement sets forth the facility usage, fees and services, ticket administration and revenue allocation, sponsorship sales
administration and revenue allocation, and net income disposition. In accordance with this agreement: (i) RE Arena Inc.
collects all ticket revenue from ticketed UND athletic events (hockey, football, men’s and women’s basketball, and
volleyball), RE Arena, Inc. retains 52 percent of such ticket revenue and remits 48 percent to the UND, and (ii) RE Arena
Inc. collects all sponsorship sales revenue from the UND athletic events at the arena, RE Arena, Inc. retains 64 percent
of such sponsorship revenue, net of direct costs, and remits 36 percent to the UND net of direct costs. In addition, UND
and RE Arena, Inc. jointly utilize the UND and RE Arena Inc. marketing staff to market and promote the UND athletic
events.
RE Arena, Inc. may contract with UND for materials and personnel in service, utility and other areas and will reimburse
UND based on separate agreements. Revenue and expense arrangements for all other UND events held at the arena
will be negotiated on an event-by-event basis.
In fiscal year 2019, gross tickets sales were $4.9 million of which RE Arena, Inc. recognized revenue of $2.5 million with
a net due to UND $2.4 million. Gross ticket sales for the next athletic season year are recorded in deferred revenue at
gross by RE Arena, Inc. for a total of $2.9 million.
RE Arena, Inc. recognized net sponsorship (advertising) revenue of approximately $746,000 and the net due UND in
sponsorship (advertising) income of approximately $419,000. In addition, RE Arena, Inc. allocated approximately
$670,000 of net income to UND Athletic Department for the year ended May 31, 2019. RE Arena, Inc. expensed $1.0
million to UND for utilities, maintenance staff, phone service and other expenses.
At the end of the fiscal year RE Arena, Inc. owes UND $713,000 for the annual operating agreement and monthly
services.
Amounts are reported on the accrual basis of accounting, which may or may not be the same as that used by UND. RE
Arena Inc.'s fiscal year end is May 31st, UND’s fiscal year end is June 30th. Amounts may differ between entity financial
statement because of timing differences due to different year ends.
UNIVERSITY OF NORTH DAKOTA AND UNIVERSITY OF NORTH DAKOTA FOUNDATION
UND is leasing space in the Gorecki Alumni Center in the amount of $75,000 per year. Additional rental payments
consisting of UND’s share of the operating and maintenance costs for space used in the Gorecki Alumni Center are
calculated annually.
During the year ended June 30, 2019, UND provided approximately $1.5 million of institutional support for event and
database support, annual giving campaign and shared positions. The UND Alumni Association and Foundation
(Foundation) manages UND's endowment investments and charged them $387,600 in investment management fees
during the year ended June 30, 2019. These fees and support are reported as operations, fees and miscellaneous
revenue on the Statement of Revenue, Expenses and Changes in Fund Net Assets for Component Units (FASB Basis) –
University System Foundation.
The Foundation has other receivables with UND related to the construction of the EERC and Minot Center for Family
Practice for $3.8 million and $2.0 million, respectively. The Foundation has accounts payable due to UND related to
miscellaneous services and payments of approximately $463,000.
The Foundation is leasing 45,000 square feet of land for the Gorecki Alumni Center from UND. Starting in 2016, the rate
is $0.10 per square foot, per year. The cost in fiscal year 2019 was $4,500.
On July 24, 2002, the Foundation issued $8.6 million of tax exempt lease revenue bonds to finance the construction of an
office building and the renovation of an existing building for the Energy and Environmental Research Center (EERC) of
UND. The Foundation recorded a receivable from UND of $8.6 million under the direct-financing lease arrangement. On
October 18, 2012, the Foundation issued refunding lease revenue bonds in the amount of $6.4 million to refund its
outstanding Lease Revenue Bonds, Series 2002. The Foundation also amended the related lease agreement with UND.
Interest accrues on the bonds at rates from 0.75 percent to 4.20 percent depending upon maturity. Annual and principal
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are due through fiscal year 2027 and as of June 30, 2019 was $3.8 million. The bonds are secured by a lease with UND.
The terms for the repayment are the same as the payment terms of the related bonds. During fiscal year ended June 30,
2019, the Foundation recorded payment of principal and interest of $405,000 and $157,000, respectively. The interest is
included in operations, fees and miscellaneous income on the statement of activities.
On October 24, 2003, the Foundation issued $4.4 million of tax-exempt lease revenue bonds to finance the purchase of
land and the construction of a facility for the Minot Center for Family Practice in Minot, North Dakota. The center is a
department of the School of Medicine & Health Sciences at UND. The Foundation recorded a receivable from UND of
$4.4 million due under the direct-financing lease agreement. In June 2008, the $3.7 million remaining balance of the
2003 bonds were financed with Lease Revenue Refunding Bonds, series 2008. In April 2018, the $2.2 million remaining
balance of the 2008 bonds was refinanced with Lease Revenue Bonds, Series 2018. The interest rate is fixed at 3.5%
until 2028. Payments of $133,333 are required semi-annually through 2028. The bonds are secured by a lease with
UND. Annual principal and semiannual interest payments as of June 30, 2019 was $2.0 million.
NOTE 12 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
BANK OF NORTH DAKOTA
The State, through the Bank of North Dakota, is a party to credit related financial instruments with off-balance-sheet risk
in the normal course of business to meet the financing needs of its customers. These financial instruments include
commitments to extend credit, financial standby letters of credit and guarantees related to loan programs. Those
instruments involve varying degrees of credit, elements of credit risk and interest rate risk in excess of the amount
recognized in the statement of net position. The contract amounts of those instruments reflect the extent of involvement
the State has in particular classes of off-balance-sheet financial instruments.
The State's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for
commitments to extend credit and financial standby letters of credit is represented by the contractual amount of those
instruments. The State uses the same credit policies in making commitments and conditional obligations as it does for
on-balance-sheet instruments.
Contract Amount
(in thousands)
Commitments to extend credit $ 861,421
Financial standby letters of credit 412,614
Guarantees provided 9,490
Commitments to extend credit are agreements to lend as long as there is no violation of any condition established in the
contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a
fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The amount of collateral obtained by the State upon extension of credit
is based on management’s credit evaluation of the customer. Collateral held may include accounts receivable, inventory,
property, plant and equipment, and income-producing commercial properties.
Financial standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a
customer to a third party. Those letters of credit are primarily issued to support public borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to
customers. The Bank has segmented this category into three components: (1) letters of credit, (2) confirming letters of
credit, and (3) letters of credit pledged for public deposits to North Dakota financial institutions.
Letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third
party which require this type of facility. The maturities for these letters range from three months to ten years, and the
likelihood of funding any of these letters of credit is considered to be remote. The Bank holds collateral supporting those
commitments. The Bank also has letters of credit with the North Dakota Public Finance Authority with maturities ranging
from seventeen months to twenty nine years. If the letters issued to Public Finance Authority were ever drawn upon,
Public Finance Authority is legally obligated to reimburse the Bank from funds legally available, or from any appropriation
made available to the Legislative Assembly after certification by the Industrial Commission. The likelihood of funding any
of these letters of credit is also considered to be remote. Outstanding issued letters of credit as of December 31, 2018
were $106,834,000.
Confirming letters of credit are issued to North Dakota financial institutions to support letters of credit they have issued
but are still in need of backing from an institution with a long-term, high quality bond rating. In the event these letters
were to be drawn upon, based on the terms of the agreement, the Bank would immediately withdraw funds from the
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institution’s correspondent bank account held at the Bank to cover the amount drawn. These agreements generally have
terms of 12 months or less. The likelihood of funding any of these confirming letters of credit is also considered to be
remote. Outstanding issued confirming letters of credit as of December 31, 2018 were $3,525,000.
Letters of credit pledged for public deposit to North Dakota financial institutions are issued to support public borrowing
arrangements. These letters are fully collateralized by a pool of loans pledged to the Bank. These agreement generally
have terms of 12 months or less. Financial standby letters for public deposits by North Dakota banks totaled
$302,255,000 at December 31, 2018. The likelihood of funding any of these letters of credit is also considered to be
remote. These letters of credit are authorized form of collateral for public deposits per North Dakota Century Code 21-04-
09.
The Bank has not recorded a contingent liability related to off-balance sheet activity as of December 31, 2018.
INFRASTRUCTURE REVOLVNG LOAN PROGRAM
In the normal course of business, the Loan Fund makes various commitments that are not reflected in the financial
statements. These commitments include commitments to extend credit of $38,955,000 at June 30, 2019.
NORTH DAKOTA HOUSING FINANCE AGENCY
In the normal course of business, the Agency makes various commitments that are not reflected in the financial
statements. These include commitments to extend credit and the debt reduction required when related loan acquisition
funds are not drawn down within prescribed time frames set by the specific bond resolution.
Commitments to extend credit are agreements to fund loans as long as there is no violation of any condition established
in the contracts. Commitments require the payment of a reservation fee and generally have a fixed expiration date.
Commitments to extend credit total $524,000 at June 30, 2019.
The bond resolutions require that the funds in the loan acquisition accounts be expended within 42 months of the related
bond delivery date. Any remaining funds must be used for debt reduction. The loan acquisition funds totaled $53,474,000
at June 30, 2019.
PUBLIC FINANCE AUTHORITY
In the normal course of business, the Finance Authority (a component unit) makes various commitments that are not
reflected in the financial statements. These commitments include commitments to extend credit of $269,344,000 at
December 31, 2018.
NOTE 13 - INTEREST RATE SWAP
BANK OF NORTH DAKOTA
The Bank has an outstanding interest rate swap agreement with a notional amount totaling $350 million to convert
variable rate federal funds into fixed-rate instruments over the term of the contract.
On June 5, 2014 (“June 2014 Swap”) the Bank entered into a swap agreement which matures on June 1, 2029, and the
swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a fixed payment of
2.861% and receives a variable payment based on the USD-FEDERAL FUNDS-H.15 interest rate.
On April 14, 2015 (“April 2015 Swap”) the Bank entered into a swap agreement which matures on May 1, 2030, and the
swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a fixed payment of
1.920% and receives a variable payment based on the USD-FEDERAL FUNDS-H.15 interest rate.
On August 11, 2016 (“August 2016 Swap”) the Bank entered into a swap agreement which matures on September 1,
2031, and the swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a
fixed payment of 1.483% and receives a variable payment based on the USD-1 MONTH LIBOR-BBA interest rate.
On April 5, 2017 (“April 2017 Swap”) the Bank entered into a swap agreement which matures on May 1, 2032, and the
swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a fixed payment of
2.390% and receives a variable payment based on the USD-1 MONTH LIBOR-BBA interest rate.
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On June 15, 2017 (“June 2017 Swap”) the Bank entered into a swap agreement which matures on July 1, 2032, and the
swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a fixed payment of
1.985% and receives a variable payment based on the USD-FEDERAL FUNDS-H.15 interest rate.
On March 27, 2018 (“March 2018 Swap”) the Bank entered into a swap agreement which matures on April 1, 2033, and
the swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a fixed
payment of 2.468% and receives a variable payment based on the USD-FEDERAL FUNDS-H.15 interest rate.
On June 28, 2018 (“June 2018 Swap”) the Bank entered into a swap agreement which matures on July 1, 2033, and the
swap’s notional amount is $50,000,000. Under the terms of the swap, the Bank pays the counterparty a fixed payment of
2.515% and receives a variable payment based on the USD-FEDERAL FUNDS-H.15 interest rate.
At December 31, 2018, the June 2014, March 2018 and June 2018 swaps has a negative fair values of $2,180,000,
$45,000 and $320,000, respectively, because interest rates have declined since the swap was executed. The April 2015,
August 2016, April 2017 and June 2017 swaps has a positive fair values of $2,492,000, $6,240,000, $1,404,000 and
$2,710,000, respectively, because interest rates have increased since the swap was executed.
At December 31, 2018, the Bank was not exposed to material credit risk because each counterparty is required to fully
collateralize the fair value of the swaps within $250,000 of daily mark-to-market valuations by depositing funds with the
other counterparty.
Amongst all swap counterparties for the transactions noted above, the Bank holds a net $12,150,000 in cash pledged
under collateral arrangements related to the interest rate swaps at December 31, 2018, to satisfy the collateral
requirements. The Bank is exposed to interest rate risk on its swap agreements.
The Bank is exposed to interest rate risk on its swap agreements. On its pay-fixed, receive variable interest rate swaps,
the Bank’s net payment increases as the USD-FEDERAL FUNDS-H.15 and USD-1 MONTH LIBOR-BBA interest rates
decrease.
Either the Bank or its counterparties may terminate the interest rate swap if the other party fails to perform under the
terms of the contract. Termination could result in the Bank being required to make a payment of the fair value of the swap
to counterparty.
The following table summarizes the derivative financial instrument utilized at December 31, 2018:
Fair Value Changes in Fair Value
Notional Amount Classification Amount Classification Amount
Oher Deferred
June 2014 Swap $ 50,000,000 liabilities $ (2,180,000) outflow $ 1,921,000
Deferred
April 2015 Swap 50,000,000 Other assets 2,492,000 inflow 1,598,000
Deferred
August 2016 Swap 50,000,000 Other assets 6,240,000 inflow 1,018,000
Deferred
April 2017 Swap 50,000,000 Other assets 1,404,000 inflow 1,530,000
Deferred
June 2017 Swap 50,000,000 Other assets 2,710,000 inflow 1,930,000
Oher Deferred
March 2018 Swap 50,000,000 liabilities (45,000) outflow (45,000)
Oher Deferred
June 2018 Swap 50,000,000 liabilities (320,000) outflow (320,000)
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Using rates as of December 31, 2018, the interest expense of the variable rate federal funds, variable rate 1 month
LIBOR and the net swap payments are as follows. As rates vary, the federal fund and 1 month LIBOR interest expense
and the net swap payments will vary.
Pay Fixed Receive Variable
Year Ended Contract Federal Fund 1-Month Interest Rate
December 31: Interest Interest LIBOR Interest Swap, net
2019 $ 7,811,000 $ 6,000,000 $ 2,520,000 $ (709,000)
2020 7,811,000 6,000,000 2,520,000 (709,000)
2021 7,811,000 6,000,000 2,520,000 (709,000)
2022 7,811,000 6,000,000 2,520,000 (709,000)
2023 7,811,000 6,000,000 2,520,000 (709,000)
2024-2028 39,065,000 30,000,000 12,600,000 (3,535,000)
2029-2033 22,219,000 16,800,000 7,560,000 (2,141,000)
$ 100,339,000 $ 76,800,000 $ 32,760,000 $ (9,221,000)
NORTH DAKOTA HOUSING FINANCE AGENCY
As a means to lower its borrowing costs, when compared against fixed-rate bonds at the time of issuance, the Agency
entered into several cash flow hedges or swaps in connection with various variable-rate housing bond series. The
Agency cash flow hedges are pay-fixed. All Agency cash flow hedges are pay-fixed. The intention of these swaps was to
effectively change the Agency’s interest rate on the bonds to a fixed rate. The Agency also has cash flow hedges that
were entered into in connection with variable-rate housing bond series that no longer have bonds outstanding as those
bonds have been called. The cash flow hedges that are not connected to a specific bond series hedge the risk related to
the Agency’s other variable-rate housing bonds that are unhedged.
The bonds and the related swap agreements have a stated issuance and maturity date. Some of the swaps have
optional termination dates. Under the swaps, the Agency pays the counterparty a fixed payment and receives a variable
payment computed as a percent of the London Interbank Offered Rate (LIBOR) plus a fixed percentage on the swap
notional amount. On the other hand, the bond’s variable-rate coupons are determined by the remarketing agent. If for any
reason the remarketing agent fails to act, the rate shall be the lesser of (i) the TBMA Index plus 0.25% or (ii) the
Maximum Rate as defined within the applicable series resolution.
As of June 30, 2019, the Agency no swaps with a positive fair value. Of the swaps with negative fair value, the Agency is
not exposed to credit risk. However, the swap exposes the Agency to basis risk should the relationship between LIBOR
and TBMA converge, changing the synthetic rate on bonds. The swap counterparty has guaranteed all payments and is
rated AAa/AA+/AAA by Moody’s Investor Services, Standard & Poor’s, and Fitch, respectively. To mitigate potential
credit risk, the counterparty has entered into Credit Support Agreements with Bank of New York Mellon, the Royal Bank
of Canada and Wells Fargo as a credit enhancement.
The Agency has entered into netting arrangements whenever it has entered into more than one derivative instrument
transaction with a counterparty. Under the terms of these arrangements netting provisions permit each party to net the
transactions’ fair values so that a single sum will be owed by, or owed to, the other party. At June 30, 2019, the Agency
owed the swap providers a fixed rate on the notional amount of the swaps of $2,566,000 and the swap providers owed
the Agency a variable rate on the notional amounts of $1657,000 making the net payment that the Agency owed the
swap providers $909,000.
Due to the difference in the variable rate indices, the swaps had a net negative fair value of $7,886,000 as of June 30,
2019. Accordingly, the financial derivative instrument is reported as a liability and the accumulated changes in fair value
of the swaps are reported as a deferred outflow at June 30, 2019. The coupon on the government’s variable-rate bonds
adjust to changing interest rates, the bonds do not have a corresponding fair value increase. All valuations are as of the
valuation date indicated. Mid-Market or indicative unwind valuations may be derived from broker quotations or from
proprietary models that take into consideration estimates about relevant present and future market conditions as well as
the size and liquidity of the position and any related actual or potential hedging transactions. Valuations based on other
models or different assumptions may yield different results.
The swap exposes the Agency to basis risk should the relationship between LIBOR and the actual variable rates
converge, changing the synthetic rate on the bonds. The effect of this difference in basis is indicated by the difference
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between the intended synthetic rate and the synthetic rate as of June 30, 2019. If a change occurs that results in the
rates’ moving to convergence, the expected cost savings may not be realized.
The derivative contract uses the International Swap Dealers Association Master Agreement, which includes standard
termination events, such as failure to pay and bankruptcy. The Schedule to the Master Agreement includes an “additional
termination event.” That is, the swap may be terminated if counterparty’s credit quality rating falls below “A3” as issued
by Moody’s Investors Service or “A-" as issued by Fitch Ratings or Standard & Poor’s. The swap may be terminated at
any time by the Agency or the counterparty with 30 days written notice up to limits specified in the swap agreement. If the
swap or swaps were terminated, the variable-rate bonds would no longer carry a synthetic interest rate. Also, if at the
time of terminations the swap has a negative fair value, the Agency would be liable to the counterparty for payment equal
to the swap’s fair value, but in the event the fair value is positive, the counterparty would be liable to the Agency.
The Agency is exposed to rollover risk on hedging derivative instruments that are hedges of debt that mature or may be
terminated prior to maturity of the hedged debt. When these hedging derivative instruments terminate, or in the case of a
termination option, if the counterparty exercises its option, the Agency will be re-exposed to the risks being hedged by
the hedging derivative instrument. The Agency also is exposed to rollover risk on the swaps that mature and the Agency
does not call the related variable rate debt.
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The terms of the interest rate swaps at June 30, 2019 are as follows:
1. Bond Series 2008 B 2014 B 2015 C 2015 E
2. Issuance Date 3/26/2008 6/24/2014 6/25/2015 5/1/2016
3. Maturity Date 7/1/2038 7/1/2044 1/1/2046 7/1/2036
4. Notional Amount $5,000 $27,055,000 $17,700,000 $25,000,000
5. Variable-rate Bonds $5,000 $27,055,000 $17,700,000 $25,000,000
6. Fixed Rate 4.725% 2.890% 2.486% 2.257%
7. LIBOR Percentage 100.00% 65.80% 66.20% 66.40%
8. Additional Percentage 0.00% 0.17% 0.10% 0.22%
9. Bonds Variable-rate 2.36000% 1.97000% 2.63000% N/A
10. Fair Value $(127,000) $(839,000) $(465,000) $(590,000)
11. Percentage of LIBOR 2.39800% 1.74788% 1.68748% 1.81227%
12. Synthetic Rate 4.68700% 3.11212% 3.42852% 0.44473%
13. Actual Synthetic Rate 4.92102% 2.77968% 3.17451% 2.39800%
14. Change in Fair Value $(128,000) $348,000 $(635,000) $(946,000)
15. Optional Termination Date 1/1/2020 N/A 7/1/2020 7/1/2020
1. Bond Series 2015 F 2017 C 2017 H 2018 C
2. Issuance Date 12/8/2015 5/10/2017 12/21/2017 6/14/2018
3. Maturity Date 1/1/2047 7/1/2047 7/1/2039 1/1/2049
4. Notional Amount $21,000 $20,545,000 $28,250,000 $9,355,000
5. Variable-rate Bonds $21,000 $20,545,000 $28,250,000 $9,355,000
6. Fixed Rate 2.320% 2.783% 2.266% 3.515%
7. LIBOR Percentage 100.00% 100.00% 66.40% 100.00%
8. Additional Percentage 0.00% 0.00% 0.09% 0.00%
9. Bonds Variable-rate 2.38000% 2.37408% 1.92000% 2.38000%
10. Fair Value $(183,000) $(1,138,000) $(1,188,000) $(1,121,000)
11. Percentage of LIBOR 2.39800% 2.39800% 1.68227% 2.39800%
12. Synthetic Rate 2.30200% 2.75858% 2.50373% 3.49700%
13. Actual Synthetic Rate 2.28243% 2.69555% 2.22250% 3.40774%
14. Change in Fair Value $1,199,000 $1,684,000 $1,367,000 $839,000
15. Optional Termination Date 1/1/2025 7/1/2027 7/1/2023 7/1/2027
1. Bond Series 2019 B 2019 E
2. Issuance Date 2/13/2019 6/25/2019
3. Maturity Date 1/1/2043 1/1/2050
4. Notional Amount $25,000 $12,000
5. Variable-rate Bonds $25,000 $12,000
6. Fixed Rate 2.693% 3.171%
7. LIBOR Percentage 70.00% 100.00%
8. Additional Percentage 0.00% 0.00%
9. Bonds Variable-rate 2.30000% 2.30000%
10. Fair Value $(1,417,000) $(818,000)
11. Percentage of LIBOR 1.67860% 2.39800%
12. Synthetic Rate 3.31390% 3.07300%
13. Actual Synthetic Rate 3.08702% 3.43035%
14. Change in Fair Value $(1,417,000) $(818,000)
15. Optional Termination Date 1/1/2024 7/1/2028
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Using rates as of June 30, 2019, debt service requirements of the variable-rate debt and net swap payments are as
follows. Interest calculations were based on rates as of June 30, 2019. As rates vary, variable-rate bond interest
payments and net swap payments will vary. (Expressed in thousands.)
Variable-Rate Bond
Fiscal Year Interest Rate
Ending June 30 Principal Interest Swap, Net Total
2020 $ 2,545 $ 3,694 $ 1,810 $ 8,049
2021 2,335 3,637 1,799 7,771
2022 2,130 3,585 1,789 7,504
2023 1,945 3,538 1,780 7,263
2024 1,775 3,495 1,773 7,043
2025-2029 22,865 16,445 8,387 47,697
2030-2034 34,765 14,392 6,586 55,743
2035-2039 61,750 10,067 3,991 75,808
2040-2044 47,005 4,013 1,518 52,536
2045-2049 12,900 665 219 13,784
2050-2054 1,710 14 5 1,729
$ 191,725 $ 63,545 $ 29,657 $ 284,927
NOTE 14 - SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
Most of the State’s business is with customers within the state. Concentrations of credit are present in the construction
and operation of community water facilities, loans to medical facilities for health care construction, loans to students for
post-secondary education, loans to owners of homes damaged in the 2011 floods in Barnes, Benson, Burleigh, McHenry,
Morton, Ramsey, Renville, Richland and Ward counties, loans to political subdivisions in the state for infrastructure,
single-family and multifamily mortgage loans, and the agricultural industry. Due to the pervasive nature of agriculture in
the economy of the state, all loans, regardless of type, are impacted by agriculture.
NOTE 15 - RISK MANAGEMENT
Several funds accumulate assets to cover risks that the State may incur. Specifically, the State assumes a portion or
substantially all risks associated with the following:
THE STATE FIRE AND TORNADO FUND
The State Fire and Tornado Fund, an Enterprise Fund, is financed by premiums charged to the participating funds of the
State. All monies collected must be paid into the fund for use only for the purpose outlined in NDCC 26.1-22.02.
All losses occasioned by the hazards provided for in the North Dakota Century Code must be paid out of the fund, with
the fund being reimbursed by a third-party insurance carrier for all losses in excess of $1,000,000 per occurrence. The
limit of liability of such reinsurance contract is no less than $1,000,000 during each twelve month period.
STATE BONDING FUND
The State Bonding Fund, an Enterprise Fund, is financed by premiums charged to each State agency for the bonding of
public employees and public officials.
FLEET SERVICES
Fleet Services, an Internal Service Fund, represents the State’s fleet of automobiles and is administered by the
Department of Transportation. The State is self-insured for substantially all automobile insurance (e.g., comprehensive,
collision), with the exception of liability, which is provided by the State’s Risk Management Fund (RMF). State agencies
are charged premiums to cover Fleet Service’s RMF assessment and to pay for those losses that are not covered by
RMF. These premium charges are factored into the fees agencies are charged when renting the cars.
WORKFORCE SAFETY & INSURANCE
Workforce Safety & Insurance (WSI), an Enterprise Fund, is a State insurance fund and a “no fault” insurance system,
covering the State’s employers and employees. WSI is financed by premiums assessed to employers. The rate of such
premiums is periodically adjusted to assure the solvency of WSI. The premiums are available primarily for the payment of
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claims to employees injured in the course of employment. During fiscal year 2019, a total of $147,666,582 in claims was
recognized. The liability of $1,090,944,000 is the present value of the unpaid claim liability discounted at 5% as
determined by the actuarial.
RISK MANAGEMENT FUND
Due to the loss of sovereign immunity, the 1995 Legislature established the Risk Management Fund (RMF) to pay money
damages for tort claims for which the State is liable. The statutory liability of the State is limited to a total of $250,000 per
person and $1,000,000 per occurrence. The State purchases commercial insurance for claims in excess of coverage
provided by the Fund and continues to transfer liabilities for medical malpractice and aviation to private insurance
carriers. Settlements have not exceeded insurance coverage in any of the past three fiscal years.
Revenues to the RMF are generated from contributions required from state agencies, boards and commissions, and the
University System. The need for and amount of funding is determined using a projected cost allocation approach. The
premise of this plan is that the agencies with greater expected loss costs should contribute more to the funding of the
RMF than those agencies with lessor costs. The underlying logic is that contributions should roughly equal loss costs
plus the expenses of administering the program over the long term.
The RMF liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be
reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Unpaid claim
liabilities are based on an actuarial study of the outstanding loss reserve need for the fund and a forecast of ultimate loss
and loss expense. These liabilities were determined on an undiscounted expected level of ultimate loss. Because actual
claims liabilities are affected by complex factors including inflation, changes in legal doctrines, and unanticipated damage
awards, the process used in computing claims liabilities does not necessarily result in exact amounts. Claims liabilities
will be re-evaluated periodically to take in consideration settled claims, the frequency of claims, and other economic and
social factors.
The following table presents the changes in claims liabilities balance for the fiscal years ending June 30, 2018 and 2019:
Fiscal Beginning Current Year Claims and Claims Ending
Year Balance Changes In Estimates Payments Balance
2018 $ 4,076,985 $ 923,270 $ (743,861) $ 4,256,394
2019 4,256,394 (175,718) (313,674) 3,767,002
The Risk Management Workers Compensation Program (WCP) was established to consolidate all state entities under
one workers compensation account, allowing for transitional duty between entities. The statutory liability of the fund is
limited to $100,000 per claim with Workforce Safety & Insurance, providing excess insurance for claims that exceed the
$100,000 cap. WCP pays separately for this coverage. Since the inception of WCP on July 1, 2001, forty claims
exceeded coverage by $10,687,695.
Revenues to WCP are generated from contributions required from state agencies, boards, commissions, and the
University System. The amount contributed from each agency is actuarially determined by Workforce Safety & Insurance
and based upon the number of employees, the type of work done, and claims history of each entity. Each entity also
pays a deductible of $250 per claim.
The WCP liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be
reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Because actual
claims liabilities are affected by complex factors including inflation, changes in legal doctrine, and unanticipated damage
awards, the process used in computing claims liabilities does not necessarily result in exact amounts. Claims liabilities
will be re-evaluated periodically to take into consideration settled claims, the frequency of claims, and other economic
and social factors. An actual study was performed for Workforce Safety & Insurance. The liability estimates are based on
that study.
The following table presents the changes in claims liabilities balance for the fiscal years ending June 30, 2018 and 2019:
Fiscal Beginning Current Year Claims and Claims Ending
Year Balance Changes in Estimates Payments Balance
2018 $ 5,358,784 $ 2,945,274 $ (3,422,372) $ 4,861,686
2019 4,861,686 2,639,167 (3,142,217) 4,358,636
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NOTE 16 - PUBLIC ENTITY RISK POOLS
A. GENERAL
FIRE AND TORNADO AND BONDING FUND
The Fire and Tornado Fund provides property insurance to state agencies, political subdivisions, the International Peace
Garden and the Winter Show. The Fire and Tornado Fund has issued 1,161 policies to participating entities for a total
building and content coverage of $15.2 billion. The Bonding Fund is used to provide fidelity bonding of public employees
and officials. The Fund has issued 1,892 policies to participating entities. The total coverage for the Bonding Fund is
$674.9 million. If the assets of these funds were exhausted, fund participants would not be responsible for the funds’
liabilities.
The Fire and Tornado and Bonding Fund are accounted for on the accrual basis. The Fire and Tornado Fund establishes
claim liabilities based on estimates of the ultimate cost of claims that have been reported but not settled, and of claims
incurred but not reported. The Bonding Fund establishes claim liabilities based on actual judgments obtained against the
fund but not paid prior to fiscal year end. Liabilities for incurred but not reported losses have not been established based
on prior year activity. Neither fund incurred any acquisition costs, which should have been capitalized, nor were any
liabilities recognized that were discounted. Investment income was not considered in determining the existence of
premium deficiencies.
The Fire and Tornado Fund uses reinsurance agreements to reduce its on covered losses in excess of $1.0 million.
Reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge the primary liability of
the Fund as direct insurer of the risks that are reinsured. The Fire and Tornado Fund does not report reinsured risks as
liabilities unless it is probable that those risks will not be covered by reinsurers. There were no pending losses at June
30, 2019 that would reduce the fund’s liability.
WORKFORCE SAFETY & INSURANCE
Workforce Safety & Insurance (WSI), an Enterprise Fund, is a state insurance fund and a “no fault” insurance system
covering the State’s employers and employees. At June 30, 2019, coverage extended to the following employers:
Annual Premium
$250 - $5,000 19,350
$5,001 - $50,000 4,312
$50,001 - $100,000 424
Over $100,000 381
Total Employers 24,467
WSI is financed by premiums assessed to the employers doing business in North Dakota. The premiums are available
primarily for the payment of claims to employees injured in the course of employment.
The operations of WSI are accounted for on the accrual basis. Liability for incurred loss and loss adjustment expense
(LAE) is estimated by WSI’s actuary. The estimate is developed by WSI’s actuary, taking into consideration past
experience of WSI in paying claims, and general conditions of the environment in which WSI operates. The liability is
based on the estimated ultimate costs to settle both reported and incurred but not report (IBNR) losses and LAE, and
includes the effects of inflation and other societal and economic factors. The actuarial computations also include a 4.5%
discount to report this liability at its present value. A 5% discount rate has been used in prior years; however, in 2019, the
rate was reduced to 4.5% discount. The result of the discount rate decrease, increased liabilities by $44.3 million.
Management believes the estimated liability for losses and loss adjustment expense is sufficient to cover the ultimate net
cost of incurred losses, but such loss reserves are necessarily based on estimates and the ultimate liability may be
greater or less than the amounts estimated. As adjustments to this estimated liability become necessary, such
adjustments are reflected in current operations.
For the year ended June 30, 2019, the consulting actuaries presented an estimate in the form of a range to emphasize
the uncertainty for a “long-tailed” liability insurer such as workers’ compensation. These ranges are as follows (expressed
in thousands):
Low Central Value High
Full value basis, undiscounted $ 1,602,041 $ 1,726,416 $ 1,821,531
Present value basis, discounted at 4.5% 1,013,686 1,090,944 1,151,057
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WSI has adjusted the estimated liability for unpaid loss and loss adjustment expense to the actuary’s 4.5 percent
discounted expected value of $1,090,944,000 at June 30, 2019.
While management has recorded amounts that fall within the ranges of estimated liabilities as computed under actuarial
assumptions, the high level of uncertainty indicates that actual losses and expenses could be materially higher than the
recorded estimated liability.
WSI has entered into a contract with an intermediary for reinsurance coverage for catastrophic coverage. Historically,
WSI has had up to four coverage levels, with varying retention limits of $3 million, $5 million, $10 million and $20 million.
Terms, limits and pricing are re-evaluated annually. WSI’s current 2019 calendar year has two coverage levels, with
retention limits of $10 million and $20 million. For the year ended June 30, 2019 WSI recorded ceded losses of
$1,037,258 and ceded premiums of ($184,860).
For accident years December 1, 1999 to December 1, 2002, Munich Re provided treaty excess of loss reinsurance to
WSI. In fiscal year 2019, Munich Re and WSI agreed to commute the remaining liabilities under these treaties. As a
result of this commutation, cash increased by $50.5 million and approximately $40 million of ceded liabilities were
assumed by WSI.
B. RECONCILIATION OF CLAIMS LIABILITIES
The following is a reconciliation of total claims liabilities, including an analysis of changes in aggregate liabilities for
claims and claim adjustment expenses for the current fiscal year and the prior year (expressed in thousands):
Fire And Tornado Bonding Workforce Safety & Ins
2019 2018 2019 2018 2019 2018
Unpaid claims and claims adjustment expenses
at the beginning of the year $ 1,879 $ 1,138 $ 106 $ 66 $ 1,049,386 $ 1,085,768
Incurred claims and claims adjustment
expenses:
Provision for current fiscal year 2,953 2,352 39 87 186,815 193,275
Change in provision for prior fiscal year (610) (117) - - (89,573) (77,547)
Payments and claims and adjustment expenses
attributable to:
Current fiscal year insured events (3,217) (832) 59 19 (42,252) (42,068)
Prior fiscal years’ insured events (327) (662) (106) (66) (103,685) (118,153)
Total Payments (3,544) (1,494) (47) (47) (145,937) (160,221)
Change in provision for discount - - - - 90,253 8,111
Total unpaid claims and claims adjustment
expenses at the end of the year $ 678 $ 1,879 $ 98 $ 106 $ 1,090,944 $ 1,049,386
NOTE 17 - BANK OF NORTH DAKOTA
GASB Statement No. 34 requires assets and liabilities of enterprise funds be presented in a classified format to
distinguish between current and long-term assets and liabilities. The Bank of North Dakota is the only government-owned
bank in the United States. Banks do not present a classified statement of net position because current assets are not
matched with current liabilities. Presentation of a classified statement of net position would give the false impression that
there is a liquidity problem at the bank. Presentation of a classified statement of net position for the Bank of North Dakota
would be misleading to the extent that the financial statements may be materially misstated. Therefore, the statement of
net position of the Bank of North Dakota presents assets and liabilities in order of their relative liquidity, rather than in a
classified format.
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NOTE 18 - COMMITMENTS AND CONTINGENCIES
A. LONG-TERM COMMITMENTS
INDUSTRIAL COMMISSION
The Industrial Commission has entered into various contracts with third parties for the following programs. As of June 30,
2019, the total outstanding balance on these contracts was:
Lignite Research Program $ 20,567,049
Lignite Vision 21 Program 1,367,678
Oil and Gas Research Program 5,753,306
Renewable Energy Program 2,774,012
Outdoor Heritage Fund Program 24,450,922
In addition to the contracts above, the Commission has authorized projects totaling $9,945,360 for which there is no
signed contract.
MILL AND ELEVATOR
As of June 30, 2019, the Mill had commitments to purchase 4,645,817 bushels of spring wheat and 601,675 bushels of
durum.
SCHOOL CONSTRUCTION ASSISTANCE REVOLVING LOAN FUND
As of June 30, 2019, the Fund had five outstanding commitments totaling $38,910,000 to extend credit.
HOUSING INCENTIVE FUND
The Fund makes various commitments relating to construction projects to meet unmet housing needs across North
Dakota. The Fund had $583,147 of signed commitments for construction projects as of June 30, 2019. The Fund had an
$3,910,047 of HIF funds awarded for construction projects as of June 30, 2019. The total paid on these commitments as
of June 30, 2019 was $3,326,900.
DEPARTMENT OF HUMAN SERVICES
As of June 30, 2019, the Department of Human Services had significant commitments for the purchase of various types
of services totaling $444,725,081.
NORTH DAKOTA LOTTERY
The Lottery contracts with a third party to provide an online gaming system and related services through June 30, 2022.
Total payment for these services during the year ended June 30, 2019 were $3.8 million based on 10.473% of ticket
sales. The Lottery’s future obligation through June 30, 2022 is based on 10.473% of ticket sales, there is no minimum fee
or retainer fee.
NORTH DAKOTA DEPARTMENT OF TRANSPORTATION
At June 30, 2019, the North Dakota Department of Transportation (Special Revenue Fund) had non-construction contract
commitments of approximately $90.6 million. Construction commitments at June 30, 2019, totaled approximately $372.2
million, of which $231.7 million represents federal programs which are cost reimbursable. These commitments will be
funded with future appropriations as work is performed.
NORTH DAKOTA DEVELOPMENT FUND
The board of directors has approved equity investments, loans, grants, and guaranty of collections at June 30, 2019, for
which funds have not been disbursed or written agreements entered into in the amount of $5,203,735.
NORTH DAKOTA SOYBEAN COUNCIL
As of June 30, 2019, the North Dakota Soybean Council had significant commitments of approximately $3.3 million. This
amount mainly consists of grants for the research and development of soybeans.
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STATE WATER COMMISSION
As of June 30, 2019, the State Water Commission had long-term commitments of $309,719,281 for various water
projects.
UNIVERSITY SYSTEMS
Contracts for the construction of various projects on behalf of the University System have been let as follows (expressed
in thousands):
Original Issue Paid To Date Amount To Be Paid
LRSC $ 68 $ 68 $ -
MaSU 82 - 82
MiSU 9,012 7,943 1,069
NDSCS 13,139 13,130 9
NDSU 61,946 56,203 5,743
UND 112,993 43,594 69,399
VCSU 1,390 891 499
WSC 8,432 321 8,111
Total $ 207,062 122,150 $ 84,912
OTHER CONSTRUCTION COMMITMENTS
That State has entered into construction commitments. As of June 30, 2019, the following commitment exists on other
construction contracts, in thousands:
Office of Management and Budget $ 15
Secretary of State 643
School for the Deaf 115
State Health Department 65
Department of Human Services 1,897
Industrial Commission 5,403
Financial Institutions 20
Adjutant General 29,539
Game and Fish 893
Parks and Recreation 20
Department of Transportation 244,945
B. LITIGATION
The estimated loss in all of the litigation against the State in which a loss to the State that is reasonably possible to result
in an unfavorable outcome is estimated to be $5 million.
C. QUESTIONED COSTS
The State receives federal financial assistance which is subject to review and audit by the Office of the State Auditor and
the federal government. This assistance is generally conditioned upon compliance with certain laws and regulations.
Disallowed and questioned costs relating to federal assistance could become a liability to the State. The State estimates
that the ultimate disallowances pertaining to federal assistance, if any, will be immaterial to its overall financial condition.
The single audit of the State of North Dakota for the two-year period ending June 30, 2018, was completed and issued in
March of 2019. As a result of this audit, approximately $1.9 million of identifiable questioned costs were noted. Also,
there were several findings which had potentially significant, unknown, questioned costs. The State is cooperating with
the federal government to resolve the findings and is optimistic these findings will not have a material impact on the
State.
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NOTE 19 – TOBACCO SETTLEMENT
In November 1998, the North Dakota Attorney General joined forty-five other states and five territories in a settlement
agreement against the nation’s largest tobacco manufacturer. The settlement money is intended to compensate the State
for costs it has incurred in providing health and other services to its citizens that were necessitated by the use of tobacco
products. The Master Settlement Agreement includes base payments to states totaling $220.6 billion for the next 25
years, and continues in perpetuity. The State has received total payments of $495.93 million as of June 30, 2019. The
State recognized revenue of $20.75 million of tobacco settlement revenue during the year ended June 30, 2019. The
amount of the annual payment is subject to a number of modifications, including adjustments for inflation and usage
volumes. Some of the adjustments may result in increases in the payments (inflation, for example), or other adjustments
will likely cause decreases in the payments (e.g., volume adjustments). The net effect of these adjustments on future
payments is unclear.
NOTE 20 – TERMINATION BENEFITS
PRIMARY GOVERNMENT (EXCLUDING UNIVERSITY SYSTEMS)
On June 29, 2018, the State offered a Voluntary Separation Incentive Program (VSIP) to state agencies as a tool to
assist them when planning for the 2019-21 biennium budget. Agencies independently determined whether or not it is
beneficial to offer the program to their employees. This was determined based on each agency’s budget planning
process and specific business objectives. Under the VSIP, employees were given two options. The first option was to
receive lump sum equal to three (3) month’s salary and payment equivalent to three (3) months of health insurance at the
actual cost of the current health insurance benefit as of VSIP program start date. Participating part-time employees will
receive a pro-rated amount based on their current average monthly rate of pay over the last three months. The second
option was to remain on payroll for three (3) months after separation date and receive salary and currently enrolled
benefits as if still actively working during this time. Participating part-time employees will receive a pro-rated amount
based on their current average monthly rate of pay over the last three months. The separation agreement of program
participants must be no later than April 30, 2019. In total, 218 employees from 18 state agencies elected to participate in
the VSIP for a total cost of $4.6 million in fiscal year 2019. The terms for these agreements range a payment one to three
months. The State recorded a liability at June 30, 2019 of $252,000 for future payments.
UNIVERSITY SYSTEMS
Termination benefits are benefits provided to employees who are involuntarily or voluntarily terminated, as a result of
budget reductions. Termination benefits agreements may include contract buyouts, retirement incentives, severance
lump-sum payouts and continuing healthcare coverage for a designated period of time or a combination of these
benefits. The agreement terms vary by institution. The outstanding liability is measured at the discounted present value
and projected increases in health insurance rates.
The University Systems entered into voluntary termination agreements with 109 employees for a cost of $4.2 million in
fiscal year 2019. The terms for these agreements range from one month to eighteen months. The University Systems
recorded a liability at June 30, 2019 of $2.1 million for future payments.
During the same time-period, The University Systems entered into involuntary separation agreements with 10 employees
for a cost of $146,000. The payments of benefits were for a one-month time period and there is no future liability for
these arrangements at June 30, 2019.
In fiscal year 2019, NDUS incurred $718,000 in expenses related to voluntary termination agreements entered into in
prior fiscal years for 26 employees. The terms for these agreements range from three month to thirty-eight months. At
June 30, 2019, the liability for future payments was $456,000.
NOTE 21 - SUBSEQUENT EVENTS
BANK OF NORTH DAKOTA
In May and October 2019 the Bank entered into interest rate swaps with Goldman Sachs, which resulted in a total fixed
rate funding commitment of $100 million for 15 years. These transactions were completed to hedge fixed rate loan
exposure, primarily in mortgage and DEAL loans. The Bank also has seven other interest rate swaps for the same
purpose with a notional amount of $50 million each with Goldman Sachs (3), Wells Fargo (3) and SunTrust Bank (1). As
of October 31, 2019, the market value position of all interest rate swap transactions was a net loss of $35.3 million.
The 2015 Legislature authorized a transfer of up to $100 million from the Bank to fund an Infrastructure Loan Fund for
North Dakota cities and counties. They also transferred an additional $50 million from the Strategic Investment and
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Improvement Fund to this same revolving loan fund. So far, the Bank has committed to $186 million of infrastructure
loans. The legislation mandated that the money from the Strategic Investment and Improvement Fund be used to fund
the initial $50 million of commitments and the drawdown of up to $100 million from the Bank to fund activity over the
initial $50 million. As of October 31, 2019, the Bank has transferred $48 million of its capital to fund its portion of the
Infrastructure Loan Fund. In the 2019 Legislature, legislation passed to add up to $40 million of additional contribution
from the Strategic Investment and Improvement Fund should oil tax collections exceed $755 million. Oil tax collections
exceeded $780 million, which resulted in an additional contribution of $25 million to the Infrastructure Loan Fund. That
$25 million will be spent prior to drawing the remaining $52 million from the Bank’s retained earnings.
The 2019 Legislature allowed the Reinsurance Association to establish a credit line at the Bank in the amount of $25
million to provide reimbursements to member insurers. As of October 31, 2019, the Reinsurance Association has not
applied for this line of credit.
NORTH DAKOTA HOUSING FINANCE AGENCY
The Agency issued Series 2019F Homeownership Revenue Bonds totaling $80 million. The bonds have an interest rate
ranging from 1.15% to 3.75% and mature between July 1, 2020 and January 1, 2050.
UNIVERSITY SYSTEMS
On August 21, 2019, WSC issued tax exempt certificates of participation series 2019 totaling $7.3 million. The proceeds
will fund an infrastructure and energy improvement project, including renovations to existing heating, ventilation, controls
and deferred maintenance improvements to buildings located on WSC’s campus. WSC entered into a lease-purchase
agreement on August 1, 2019, with Johnson Controls, Inc. (JCI). JCI will construct the project and provide operations and
maintenance assistance through August 1, 2048. The certificates of participation were rated BBB by Standard and
Poor’s.
On October 1, 2019, the University of North Dakota issued $71.5 million, Series 2019A Housing and Auxiliary Facilities
Revenue Bonds. The proceeds will be used to demolish the current student union building and to construct a new
student union building. The bond payments commence on April 1, 2020 and mature on April 1, 2050. The security for the
bonds is pledged revenues from net housing and auxiliary facilities system and pledged fees. The bonds were issued
with a Moody’s Investor Services rating of Aa3 with a stable outlook.
PUBLIC FINANCE AUTHORITY
Subsequent to year end, the Agency issued $2.515 million of bonds payable for its capital financing program. The bonds
have an interest rate ranging from 1.75% to 4.0% and mature between 2020 and 2024.
REBUILDERS LOAN PROGRAM
As of October 31, 2019, the outstanding loans total $25.5 million to 1,184 borrowers. The 2019 legislature allowed an
additional $3.75 million in rebuilders loans for severe flooding in northwestern North Dakota. As a result, an additional 5
loans totaling $375,000 have been applied for under this program.
NOTE 22 - NEW PRONOUNCEMENTS
The State implemented the following new pronouncement for fiscal year 2019:
GASB Statement No. 83, Certain Asset Retirement Obligations, addresses accounting and financial reporting for certain
asset retirement obligations (AROs). This Statement establishes criteria for determining the timing and pattern of
recognition of a liability and corresponding deferred outflow of resources for AROs. It also establishes disclosure of
information about the nature of a government’s AROs, the methods and assumptions used for the estimates of the
liabilities, and the estimated remaining useful life of the associated tangible capital assets. The requirements of this
Statement are effective for reporting periods beginning after June 15, 2018. Earlier application is encouraged.
GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements,
improves the information that is disclosed in notes to government financial statements related to debt, including direct
borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing
information related to debt. This Statement requires that additional essential information related to debt be disclosed in
notes to financial statements, including unused lines of credit; assets pledged as collateral for the debt; and terms
specified in debt agreements related to significant events of default with finance-related consequences, significant
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termination events with finance-related consequences, and significant subjective acceleration clauses. This Statement is
effective for reporting periods beginning after June 15, 2018. Earlier application is encouraged.
The State will implement the following new pronouncements for fiscal years ending after 2019:
GASB Statement No. 84, Fiduciary Activities, provides guidance regarding the identification of fiduciary activities for
accounting and financial reporting purposes and how those activities should be reported. This Statement establishes
criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1)
whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary
relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit
arrangements that are fiduciary activities. The requirements of this Statement are effective for reporting periods
beginning after December 15, 2018. Earlier application is encouraged.
GASB Statement No. 87, Leases, establishes a single model for lease accounting based on the foundational principle
that leases are financings of the right to use an underlying asset. This Statement requires recognition of certain lease
assets and liabilities for leases that were previously classified as operating leases and recognized as inflows of resources
or outflows of resources based on the payment provisions of the contract. Under this Statement, a lessee is required to
recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease
receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about
governments’ leasing activities. This Statement is effective for reporting periods beginning after December 15, 2019.
Earlier application is encouraged.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, establishes
accounting requirements for interest cost incurred before the end of a construction period. This Statement requires that
interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost
is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost
incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a
business-type activity or enterprise fund. The requirements of this Statement are effective for reporting periods beginning
after December 15, 2019. Earlier application is encouraged.
GASB Statement No. 90, Majority Equity Interests, establishes accounting requirements for interest cost incurred before
the end of a construction period. This Statement provides guidance for reporting when a government has majority equity
interest in legally separate organizations. An equity interest is explicit and measurable if the government has a present or
future claim to the net resources of the entity and the method for measuring the government’s share of the entity’s net
resources is determinable. If government’s holding of that equity interest meets the definition of an investment, as
defined by GASB No. 72, the equity interest should be reported as an investment and measured using the equity method
and not as a component unit of the government. If a government’s holding of a majority interest in a legally separate
organization does not meet the definition of an investment, the holding of the majority equity interest results in the
government being financially accountable for the organization and therefore, the government should report the legally
separate organization as a component unit. The requirements of this Statement are effective for reporting periods
beginning after December 15, 2018. Earlier application is encouraged.
GASB Statement No. 91, Conduit Debt Obligations, provides a single method of reporting conduit debt obligations by
issuers and eliminates diversity in practice associated with (1) commitments extended by issuers, (2) arrangements
associated with conduit debt obligations, and (3) related note disclosures. This Statement clarifies the existing definition
of a conduit debt obligation; establishes that a conduit debt obligation is not a liability of the issuer; establishes standards
for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and
arrangements associated with conduit debt obligations; and improves required note disclosures. This Statement also
addresses arrangements—often characterized as leases—that are associated with conduit debt obligations. The
requirements of this Statement are effective for reporting periods beginning after December 15, 2020. Earlier application
is encouraged.
Management has not yet determined the effect these Statements will have on the State’s financial statements.
146
State of North Dakota
Required Supplementary Information
147
STATE OF NORTH DAKOTA
Required Supplemental Information
Budgetary Comparison Schedule
General Fund
For the Biennium Ended June 30, 2019
Approved Appropriation Adjusted Actual Difference
Budget Adjustments Budget Biennium Uncollected/
2017-2019 2017-2019 2017-2019 To Date Unspent
Biennium Biennium Biennium Thru 6-30-19 Thru 6-30-19
Budgetary Fund Balance, July 1 $ 30,890,381 $ - $ 30,890,381 $ 217,617,800 $ 186,727,419
Resources (Inflows):
Sales and Use Tax 1,701,747,285 70,528,921 1,772,276,206 1,786,479,717 14,203,511
Income Tax 800,816,415 146,904,486 947,720,901 1,018,161,523 70,440,622
Financial Institutions Tax - - - - -
Oil And Gas Production Tax 163,000,000 49,147,128 212,147,128 215,022,128 2,875,000
Oil Extraction Tax 237,000,000 (49,147,128) 187,852,872 187,852,872 (0)
Insurance Premium Tax 129,637,121 (19,311,224) 110,325,897 115,544,049 5,218,152
Cigarette, Cigar and Tobacco Tax 53,247,000 (1,394,452) 51,852,548 52,381,863 529,315
Wholesale Liquor Tax 18,083,000 (131,425) 17,951,575 17,768,453 (183,122)
Coal Conversion Tax 39,564,000 3,655,227 43,219,227 44,572,709 1,353,482
Gaming Tax 7,301,480 (73,159) 7,228,321 9,156,498 1,928,177
Lottery 15,000,000 (400,000) 14,600,000 15,900,000 1,300,000
Department Fees and Collections 81,983,864 2,899,574 84,883,438 81,466,893 (3,416,545)
Mineral Leasing Fees 30,500,000 8,372,687 38,872,687 42,197,590 3,324,903
Motor Vehicle Excise Tax 220,003,000 19,977,388 239,980,388 239,039,038 (941,350)
Interest on Public Funds 8,000,000 1,471,168 9,471,168 11,319,365 1,848,197
Gas Tax Administration 2,016,120 - 2,016,120 2,016,120 -
Transfers In 821,916,604 101,489,848 923,406,452 1,074,569,845 151,163,393
Total Revenue Inflows 4,329,815,889 333,989,039 4,663,804,928 4,913,448,662 249,643,734
-
Amounts Available for Appropriation 4,360,706,270 333,989,039 4,694,695,309 5,131,066,462 436,371,153
Charges to Appropriations (Outflows):
General Government:
Governor's Office 4,007,758 15,000,000 19,007,758 18,618,908 388,850
Secretary of State 5,520,282 2,200,620 7,720,902 6,503,661 1,217,241
Secretary of State Public Printing 288,450 - 288,450 258,942 29,508
Office of Management and Budget 31,220,260 3,754,817 34,975,077 30,912,455 4,062,622
Information Technology 20,532,334 - 20,532,334 20,508,160 24,174
State Auditor 9,498,608 16,000 9,514,608 9,260,450 254,158
State Treasurer 1,747,399 20,000 1,767,399 1,657,326 110,073
Attorney General 44,795,840 1,620,065 46,415,905 45,604,153 811,752
Tax Department 51,264,499 2,191,623 53,456,122 51,772,543 1,683,579
Legislative Assembly 14,159,170 1,308,157 15,467,327 14,048,930 1,418,397
Legislative Council 11,891,138 4,601,140 16,492,278 10,110,101 6,382,177
Supreme Court 102,257,770 - 102,257,770 99,313,437 2,944,333
Legal Counsel for Indigents 17,983,876 - 17,983,876 16,712,744 1,271,132
Education:
Public Instruction 1,435,601,984 700,711 1,436,302,695 1,423,630,252 12,672,443
Land Department - 1,325,500 1,325,500 1,325,425 75
State Library 5,618,301 - 5,618,301 5,607,869 10,432
School for the Deaf 7,488,526 209,115 7,697,641 7,487,736 209,905
School for the Blind 4,394,146 - 4,394,146 4,394,026 120
Vocational Education 29,556,283 - 29,556,283 29,145,924 410,359
Health & Human Services:
Dept. of Health 43,474,460 90,000 43,564,460 41,868,220 1,696,240
Veteran's Home 5,951,439 234,679 6,186,118 5,990,029 196,089
Indian Affairs Commission 1,112,111 - 1,112,111 1,080,134 31,977
Veteran's Affairs 1,155,162 - 1,155,162 1,093,826 61,336
Dept. of Human Services-Management 57,120,407 28,964,777 86,085,184 80,270,665 5,814,519
Dept. of Human Services-Program and Policy 1,058,183,935 (28,594,352) 1,029,589,583 1,018,798,922 10,790,661
Dept. of Human Services-Centers 113,316,558 2,123,236 115,439,794 113,622,209 1,817,585
Dept. of Human Services-Institutions 84,610,450 9,167,940 93,778,390 89,177,552 4,600,838
Dept. of Human Services-County Social Service 26,000,000 - 26,000,000 19,312,317 6,687,683
Protection and Advocacy 2,958,999 - 2,958,999 2,958,983 16
Job Service 545,793 - 545,793 437,493 108,300
Regulatory:
Industrial Commission 25,408,987 2,628,086 28,037,073 26,618,928 1,418,145
Labor Commission 2,303,986 - 2,303,986 1,892,463 411,523
Public Service Commission 6,630,762 - 6,630,762 6,179,154 451,608
Securities Commissioner 2,184,714 - 2,184,714 2,023,634 161,080
Public Safety and Corrections:
Highway Patrol 42,527,428 - 42,527,428 41,019,557 1,507,871
Corrections & Rehab 214,336,704 - 214,336,704 208,430,637 5,906,067
Adjutant General 25,886,422 2,965,369 28,851,791 27,640,437 1,211,354
Agriculture & Commerce:
Department of Commerce 31,342,680 31,678,450 63,021,130 30,952,990 32,068,140
Department of Agriculture 9,109,101 3,900 9,113,001 9,103,944 9,057
State Fair 515,665 - 515,665 515,665 -
Racing Commision 379,621 - 379,621 379,620 1
Natural Resources:
Historical Society 16,673,644 1,113,136 17,786,780 17,137,752 649,028
Council on the Arts 1,564,876 - 1,564,876 1,561,846 3,030
Parks and Recreation 14,654,276 5,358,616 20,012,892 17,049,176 2,963,716
Transportation:
Aeronautics Commission 900,000 - 900,000 900,000 -
Department of Transportation 38,016,031 38,016,031 23,569,851 14,446,180
Transfers Out 723,587,837 78,741,128 802,328,965 743,371,125 58,957,840
Total Charges to Appropriations 4,310,262,641 205,438,744 4,515,701,385 4,329,830,171 185,871,214
Ending Budgetary Fund Balance $ 50,443,629 $ 128,550,295 $ 178,993,924 $ 801,236,291 $ 622,242,367
148
STATE OF NORTH DAKOTA
Required Supplemental Information
Budgetary Comparison Schedule
Budget to GAAP Reconciliation
General Fund
For the Biennium Ended June 30, 2019
Explanation of Differences between Budgetary Inflows and Outflows and GAAP Revenues and
for the General Fund Expenditures
Sources/Inflows of resources
Actual Amounts (budgetary basis) "total revenue inflows" 4,913,448,662
from the budgetary comparison schedule
Backing out 2018 activity (2,348,637,808)
Differences-Budget to GAAP:
The period of availability for revenue recognition for budget purposes differs from (439,454,229)
the GAAP basis.
Funds considered General funds for GAAP but not for Budget 1,061,092,980
Certain due from other funds are recorded under GAAP, but not Budget 2,826,630
Reimbursement activity between state agencies is eliminated only for GAAP (398,277)
Proceeds are recorded for new capital leases on GAAP, but not for Budget 22,628
Repayment received on loan receivable are revenue for Budget to GAAP 135,906
Total revenues, capital lease acquisitions, and transfers as reported on the statement
of revenues, expenditures, and changes in fund balance-governmental funds $ 3,189,036,492
Uses/Outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule 4,329,830,171
Backing out Expenditures from FY2018
(2,166,017,840)
Differences-Budget to GAAP:
Estimated liabilities are recorded as expenditures for GAAP but not for Budget 576,389
Funds considered General funds for GAAP but not for Budget 103,110,583
New capital leases are recorded as expenditures for GAAP, but not for Budget 22,628
Certain due to other funds are recorded under GAAP, but not for Budget 4,128,392
Total expenditures, sale of capital assets, and transfers as reported on the statement
of revenues, expenditures, and changes in fund balance-governmental funds $ 2,271,650,323
149
STATE OF NORTH DAKOTA
Required Supplemental Information
Budgetary Comparison Schedule
Federal Fund
For the Biennium Ended June 30, 2019
Approved Appropriation Adjusted Actual Difference
Budget Adjustments Budget Biennium Uncollected/
2017-2019 2017-2019 2017-2019 To Date Unspent
Biennium Biennium Biennium Thru 6-30-19 Thru 6-30-19
Budgetary Fund Balance, July 1 $ - $ - $ - - $ -
Resources (Inflows):
Other Budgeted Income 3,733,229,262 74,010,488 3,807,239,750 3,282,287,101 (524,952,649)
Total Revenue Inflows 3,733,229,262 74,010,488 3,807,239,750 3,282,287,101 (524,952,649)
Amounts Available for Appropriation 3,733,229,262 74,010,488 3,807,239,750 3,282,287,101 524,952,649
Charges to Appropriations (Outflows):
General Government:
Secretary of State 402,655 53,000 455,655 455,344 311
Information Technology 2,875,000 - 2,875,000 284,428 2,590,572
State Auditor 1,463,285 - 1,463,285 1,147,134 316,151
Attorney General 16,953,660 (5,676,808) 11,276,852 6,936,884 4,339,968
Tax Department 125,000 - 125,000 22,341 102,659
Supreme Court 1,339,138 - 1,339,138 1,081,431 257,707
Education:
Public Instruction 288,306,970 18,000,000 306,306,970 291,375,175 14,931,795
State Library 2,155,708 124,500 2,280,208 1,976,693 303,515
School for the Deaf 351,993 - 351,993 187,006 164,987
Vocational Education 9,461,692 478,156 9,939,848 9,332,107 607,741
Health & Human Services:
Dept. of Health 119,132,089 174,000 119,306,089 104,947,332 14,358,757
Veteran's Affairs 2,091,571 - 2,091,571 1,024,864 1,066,707
Dept. of Human Services-Management 125,979,264 65,210,501 191,189,765 127,907,600 63,282,165
Dept. of Human Services-Program and Policy 2,003,389,340 (17,984,235) 1,985,405,105 1,803,974,927 181,430,178
Dept. of Human Services-Centers 68,285,042 (415,288) 67,869,754 55,597,316 12,272,438
Dept. of Human Services-Institutions 30,666,923 6,189,820 36,856,743 33,760,701 3,096,042
Protection and Advocacy 3,488,601 - 3,488,601 3,046,792 441,809
Job Service 53,851,918 645,000 54,496,918 41,809,219 12,687,699
Regulatory:
Insurance Department 619,326 - 619,326 537,072 82,254
Industrial Commission 238,004 - 238,004 223,625 14,379
Labor Commission 439,916 - 439,916 439,870 46
Public Service Commission 10,731,348 - 10,731,348 8,123,369 2,607,979
Public Safety and Corrections:
Highway Patrol 6,421,209 - 6,421,209 6,418,217 2,992
Corrections & Rehab 10,539,317 - 10,539,317 9,426,932 1,112,385
Adjutant General 163,109,179 7,211,842 170,321,021 79,889,966 90,431,055
Agriculture & Commerce:
Department of Commerce 48,207,071 - 48,207,071 42,177,583 6,029,488
Department of Agriculture 12,089,336 - 12,089,336 7,900,807 4,188,529
Natural Resources:
Historical Society 3,155,795 - 3,155,795 1,661,915 1,493,880
Council on the Arts 1,675,407 - 1,675,407 1,441,747 233,660
Game and Fish 38,222,467 - 38,222,467 34,357,377 3,865,090
Parks and Recreation 5,477,782 - 5,477,782 2,525,992 2,951,790
Water Commission 27,473,887 - 27,473,887 17,449,957 10,023,930
Transportation:
Aeronautics Commission 1,025,000 - 1,025,000 842,403 182,597
Department of Transportation 673,484,369 - 673,484,369 584,002,975 89,481,394
Total Charges to Appropriations 3,733,229,262 74,010,488 3,807,239,750 3,282,287,101 524,952,649.00
Ending Budgetary Fund Balance $ - $ - $ - $ - $ -
150
STATE OF NORTH DAKOTA
Required Supplemental Information
Budgetary Comparison Schedule
Budget to GAAP Reconciliation
Federal Fund
For the Biennium ended June 30, 2019
Explanation of Differences between Budgetary Inflows and Outflows and GAAP Revenues and
for the Federal Fund Expenditures
Sources/Inflows of resources
Actual Amounts (budgetary basis) "total revenue inflows"
from the budgetary comparison schedule 3,282,287,101
Backing out 2018 activity (1,614,312,923)
Differences-Budget to GAAP:
The period of availability for revenue recognition for budget purposes differs from 40,721,564
the GAAP basis.
Total revenues, capital lease acquisitions, and transfers as reported on the statement
of revenues, expenditures, and changes in fund balance-governmental funds $ 1,708,695,742
Uses/Outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule 3,282,287,101
Backing out Expenditures from FY2018 (1,614,312,923)
Differences-Budget to GAAP:
Estimated liabilities are recorded as expenditures for GAAP but not for Budget 45,234,389
New Loans issued are expenditures for Budget but not for GAAP (13,956,048)
GAAP, but not Budget expenditures are reduced by year end inventory balances 17,444,559
Intrafund activity eliminated for GAAP (12,994,884)
Certain due to other funds are recorded under GAAP, but not for Budget 10,494,715
Total expenditures, sale of capital assets, and transfers as reported on the statement
of revenues, expenditures, and changes in fund balance-governmental funds $ 1,714,196,909
151
STATE OF NORTH DAKOTA
Required Supplemental Information
Budgetary Comparison Schedule
State Fund
For the Biennium Ended June 30, 2019
Approved Appropriation Adjusted Actual Difference
Budget Adjustments Budget Biennium Uncollected/
2017-2019 2017-2019 2017-2019 To Date Unspent
Biennium Biennium Biennium Thru 6-30-19 Thru 6-30-19
Budgetary Fund Balance, July 1 $ - $ - $ - $ - $ -
Resources (Inflows):
Other Budgeted Income 3,061,198,974 511,262,860 3,572,461,834 2,555,572,232 (1,016,889,602)
Total Revenue Inflows 3,061,198,974 511,262,860 3,572,461,834 2,555,572,232 (1,016,889,602)
Amounts Available for Appropriation 3,061,198,974 511,262,860 3,572,461,834 2,555,572,232 (1,016,889,602)
Charges to Appropriations (Outflows):
General Government:
Governor's Office - 265,918.00 265,918.00 203,128.00 62,790.00
Secretary of State 2,835,500.00 970,673.00 3,806,173.00 1,750,021.00 2,056,152.00
Office of Management & Budget 11,234,087.00 3,448,629.00 14,682,716.00 9,777,337.00 4,905,379.00
Information Technology 221,691,988.00 - 221,691,988.00 136,894,190.00 84,797,798.00
State Auditor 1,948,202.00 - 1,948,202.00 1,615,347.00 332,855.00
State Treasurer - 8,100,000.00 8,100,000.00 7,965,000.00 135,000.00
Attorney General 31,260,660.00 7,750,944.00 39,011,604.00 30,212,202.00 8,799,402.00
Administrative Hearings 2,918,634.00 - 2,918,634.00 2,566,703.00 351,931.00
Legislative Council 70,000.00 - 70,000.00 49,232.00 20,768.00
Supreme Court 1,982,701.00 - 1,982,701.00 586,627.00 1,396,074.00
Legal Counsel for Indigents 2,946,747.00 (76,759.00) 2,869,988.00 1,989,420.00 880,568.00
Education:
Public Instruction 609,240,095.00 - 609,240,095.00 607,515,326.00 1,724,769.00
Land Department 238,481,273.00 61,552,792.00 300,034,065.00 69,060,346.00 230,973,719.00
State Library 91,852.00 - 91,852.00 91,783.00 69.00
School for the Deaf 2,846,451.00 23,495.00 2,869,946.00 1,669,050.00 1,200,896.00
School for the Blind 1,214,747.00 - 1,214,747.00 866,839.00 347,908.00
Vocational Education 2,631,974.00 - 2,631,974.00 2,050,107.00 581,867.00
Health & Human Services:
Dept. of Health 38,887,869.00 (378,723.00) 38,509,146.00 32,941,090.00 5,568,056.00
Veteran's Home 18,740,593.00 278,281.00 19,018,874.00 17,191,292.00 1,827,582.00
Veteran's Affiars - 80,000.00 80,000.00 80,000.00
Dept. of Human Services-Management 3,500,294.00 12,088,236.00 15,588,530.00 11,138,485.00 4,450,045.00
Dept. of Human Services-Program and Policy 167,768,179.00 (16,677,838.00) 151,090,341.00 115,103,327.00 35,987,014.00
Dept. of Human Services-Centers 14,447,889.00 (6,267.00) 14,441,622.00 14,253,090.00 188,532.00
Dept. of Human Services-Institutions 25,143,851.00 (65,854.00) 25,077,997.00 25,077,995.00 2.00
Dept. of Human Services-County Social Service 134,700,000.00 - 134,700,000.00 134,699,998.00 2.00
Job Service 1,047,238.00 - 1,047,238.00 497,347.00 549,891.00
Regulatory:
Insurance Department 25,174,104.00 - 25,174,104.00 24,176,602.00 997,502.00
Industrial Commission 22,055,202.00 (1,261.00) 22,053,941.00 19,547,959.00 2,505,982.00
Public Service Commission 1,689,668.00 - 1,689,668.00 599,682.00 1,089,986.00
Finanacial Institutions 8,409,912.00 - 8,409,912.00 8,052,433.00 357,479.00
Securities Commission 170,000.00 - 170,000.00 78,289.00 91,711.00
Public Safety and Corrections:
Highway Patrol 11,918,069.00 (1,575,108.00) 10,342,961.00 8,427,456.00 1,915,505.00
Corrections & Rehab 28,724,843.00 - 28,724,843.00 23,077,966.00 5,646,877.00
Adjutant General 35,359,301.00 4,258,574.00 39,617,875.00 22,827,488.00 16,790,387.00
Agriculture & Commerce:
Department of Commerce 20,678,587.00 2,047,060.00 22,725,647.00 11,777,280.00 10,948,367.00
Department of Agriculture 10,118,340.00 1,500,000.00 11,618,340.00 8,667,524.00 2,950,816.00
Racing Commission 162,557.00 - 162,557.00 116,832.00 45,725.00
Natural Resources:
Historical Society 1,000,000.00 1,757,943.00 2,757,943.00 2,086,919.00 671,024.00
Council of Arts 111,515.00 - 111,515.00 50,025.00 61,490.00
Game and Fish 45,753,755.00 2,384,550.00 48,138,305.00 38,182,161.00 9,956,144.00
Parks and Recreation 13,561,798.00 (47,237.00) 13,514,561.00 10,847,976.00 2,666,585.00
Water Commission 694,699,588.00 96,295,369.00 790,994,957.00 414,743,806.00 376,251,151.00
Transportation:
Aeronautics Commission 8,960,412.00 2,500,000.00 11,460,412.00 8,640,851.00 2,819,561.00
Department of Transportation 597,020,499.00 324,789,443.00 921,809,942.00 727,905,701.00 193,904,241.00
Total Charges to Appropriations 3,061,198,974.00 511,262,860.00 3,572,461,834.00 2,555,572,232.00 1,016,889,602.00
Ending Budgetary Fund Balance $ - $ - $ - $ - $ -
152
STATE OF NORTH DAKOTA
Required Supplemental Information
Budgetary Comparison Schedule
Budget to GAAP Reconciliation
State Fund
For the Biennium ended June 30, 2019
Explanation of Differences between Budgetary Inflows and Outflows and GAAP Revenues and
for the State Fund Expenditures
Sources/Inflows of resources
Actual Amounts (budgetary basis) "total revenue inflows"
from the budgetary comparison schedule 2,555,572,232
Backing out 2018 activity (1,262,622,176)
Differences-Budget to GAAP:
The period of availability for revenue recognition for budget purposes differs from 1,942,057,542
the GAAP basis.
Total revenues, capital lease acquisitions, and transfers as reported on the statement
of revenues, expenditures, and changes in fund balance-governmental funds $ 3,235,007,598
Uses/Outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule 2,555,572,232
Backing out Expenditures from FY2018 (1,262,622,176)
Differences-Budget to GAAP:
Estimated liabilities are recorded as expenditures for GAAP but not for Budget 1,453,088,464
New Loans issued are expenditures for Budget but not for GAAP (6,012,616)
GAAP, but not Budget expenditures are reduced by year end inventory balances (1,240,407)
Intrafund activity eliminated for GAAP (546,166,097)
Certain due to other funds are recorded under GAAP, but not for Budget 312,414
Total expenditures, sale of capital assets, and transfers as reported on the statement
of revenues, expenditures, and changes in fund balance-governmental funds $ 2,192,931,814
153
STATE OF NORTH DAKOTA
Note To Required Supplemental Information -
Budgetary Reporting
For the Biennium Ended June 30, 2019
The Budgetary Comparison Schedules present comparisons of the original and revised legally adopted
budgets with actual data on a budgetary basis for major funds. The only major fund with a legally adopted
budget is the General Fund. All other funds are budgeted together as "Other Budgeted Funds." A budgetary
schedule has been done for these other funds because they include budgeted amounts for the Federal Fund
and State Funds, which are major special revenue funds. These amounts are reported on the schedules entitled
"Federal Funds" and "State Funds".
North Dakota's Appropriation Acts include a dual legal level of budgetary control - one at the General Fund
versus Other Budget Income level for each agency and one at the line item level for each agency. Line
items are not separate between General Fund and Other Budgeted Income so that control is not presented
in our budgetary comparison schedule for major funds. The legal level of control for all agencies is reported
in a publication titled "State of North Dakota 2017-2019 Biennium Budget and Actual Detail (Budgetary
Basis) For the Fiscal Year Ended June 30, 2019." This budget information is available through the Office of
Management and Budget, 600 East Boulevard Ave Dept. 110, Bismarck, ND 58505. For the 2017-2019
biennium there were general, federal, and special fund supplemental appropriations of $790,712,092.
The Budgetary Comparison Schedule reports expenditures on a budgetary basis. The accounting principles
applied for purposes of developing data on a budgetary basis differ from those used to present the
financial statements in accordance with GAAP. Reconciliations of the three for the Fiscal Year ended June 30,
2018, for the General Fund, Federal Fund, and State Fund is on the previous pages.
154
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of State’s Share of Net Pension Liability
North Dakota Public Employee Retirement System
Last 10 Fiscal Years*
(Dollars in thousands)
Employer’s
Employer’s Employer’s proportionate share Plan fiduciary
proportion of proportionate of the net pension net position as
the net share of the net liability (asset) as a a percentage
pension pension liability Employer’s covered Plan fiduciary percentage of its of the total
liability (asset) (asset) payroll net position covered payroll pension liability
2019 50.378759% $859,160 $569,979 $1,496,340 150.74% 63.53%
2018 51.879909% 833,182 588,960 1,415,199 141.47% 62.65%
2017 53.421343% 520,338 566,915 1,290,070 91.78% 71.10%
2016 54.824190% 365,845 494,732 1,300,271 73.95% 77.70%
2015 55.154588% 348,760 477,406 1,258,398 73.05% 78.17%
*Complete data for this schedule is not available prior to 2015. Amounts presented for each fiscal year have a measurement date of
the previous fiscal year end.
Required Supplementary Information
Schedule of State’s Contributions
North Dakota Public Employee Retirement System
Last 10 Fiscal Years*
(Dollars in thousands)
Contributions in relation Contribution Contributions as a
Statutorily required to the statutorily deficiency Employer’s covered percentage of covered
contribution required contribution (excess) payroll payroll
2019 $40,036 $(40,022) $ 14 $569,875 7.02%
2018 39,824 (39,815) 9 569,979 6.99%
2017 41,089 (41,034) 55 588,960 6.98%
2016 39,895 (40,330) (435) 566,915 7.11%
2015 37,076 (37,571) (495) 494,732 7.59%
*Complete data for this schedule is not available prior to 2015.
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of State’s Share of Net Pension Liability
North Dakota Highway Patrolmen’s Retirement System
Last 10 Fiscal Years*
(Dollars in thousands)
Employer’s
Employer’s proportionate share of Plan fiduciary
Employer’s proportionate the net pension net position as
proportion of share of the net liability (asset) as a a percentage of
the net pension pension liability Employer’s Plan fiduciary percentage of its the total
liability (asset) (asset) covered payroll net position covered payroll pension liability
2019 100.00% $19,457 $10,929 $78,929 181.21% 80.22%
2018 100.00% 20,711 10,934 73,336 189.42% 77.98%
2017 100.00% 22,111 10,527 65,811 210.04% 74.85%
2016 100.00% 13,436 10,146 66,676 132.43% 83.23%
2015 100.00% 9,766 9,348 65,667 104.47% 87.05%
*Complete data for this schedule is not available prior to 2015. Amounts presented for each fiscal year have a measurement date of
the previous fiscal year end.
Required Supplementary Information
Schedule of State’s Contributions
North Dakota Highway Patrolmen’s Retirement System
Last 10 Fiscal Years*
(Dollars in thousands)
Contributions in relation Contribution Contributions as a
Statutorily required to the statutorily deficiency Employer’s covered percentage of covered
contribution required contribution (excess) payroll payroll
2019 $2,091 $(2,091) $ - $10,608 19.71%
2018 2,153 (2,153) - 10,929 19.70%
2017 2,154 (2,154) - 10,934 19.70%
2016 2,127 (2,127) - 10,527 20.21%
2015 2,002 (2,002) - 10,146 19.73%
*Complete data for this schedule is not available prior to 2015.
156
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of State’s Share of Net Pension Liability
Retirement Plan for the Employees of Job Service North Dakota
Last 10 Fiscal Years*
(Dollars in thousands)
Employer’s
Employer’s proportionate share Plan fiduciary
Employer’s proportionate of the net pension net position as
proportion of share of the net liability (asset) as a a percentage of
the net pension pension liability Employer’s Plan fiduciary net percentage of its the total
liability (asset) (asset) covered payroll position covered payroll pension liability
2019 100.00% $(27,459) $471 $95,588 (6,590.37)% 140.30%
2018 100.00% (33,636) 563 97,265 (5,974.42)% 152.86%
2017 100.00% (35,329) 565 96,534 (6,252.92)% 157.72%
2016 100.00% (32,893) 674 96,283 (4,880.27)% 151.89%
2015 100.00% (32,650) 753 97,697 (4,335.99)% 150.20%
*Complete data for this schedule is not available prior to 2015. Amounts presented for each fiscal year have a measurement date of
the previous fiscal year end.
Required Supplementary Information
Schedule of State’s Contributions
Retirement Plan for the Employees of Job Service North Dakota
Last 10 Fiscal Years*
(Dollars in thousands)
Contributions in relation Contribution Contributions as a
Statutorily required to the statutorily deficiency Employer’s covered percentage of covered
contribution required contribution (excess) payroll payroll
2019 $ - $ - $ - $ 417 0.00%
2018 - - - 471 0.00%
2017 - - - 563 0.00%
2016 - - - 565 0.00%
2015 - - - 674 0.00%
*Complete data for this schedule is not available prior to 2015.
157
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of State’s Share of Net Pension Liability
North Dakota Teachers’ Fund for Retirement
Last 10 Fiscal Years*
(Dollars in thousands)
Employer’s
Employer’s proportionate share Plan fiduciary
Employer’s proportionate of the net pension net position as
proportion of share of the net liability (asset) as a a percentage of
the net pension pension liability Employer’s Plan fiduciary net percentage of its the total
liability (asset) (asset) covered payroll position covered payroll pension liability
2019 0.665791% $8,874 $4,397 $16,849 201.82% 65.50%
2018 0.652945% 8,968 4,294 15,413 208.85% 63.20%
2017 0.666339% 9,762 4,329 14,155 225.50% 59.20%
2016 0.678409% 8,873 4,173 14,531 212.63% 62.10%
2015 0.616525% 6,460 3,576 12,891 180.65% 66.60%
*Complete data for this schedule is not available prior to 2015. Amounts presented for each fiscal year have a measurement date of
the previous fiscal year end.
Required Supplementary Information
Schedule of State’s Contributions
North Dakota Teachers’ Fund for Retirement
Last 10 Fiscal Years*
(Dollars in thousands)
Contributions in relation Contribution Contributions as a
Statutorily required to the statutorily deficiency Employer’s covered percentage of covered
contribution required contribution (excess) payroll payroll
2019 $542 $(542) $- $4,252 12.75%
2018 561 (561) - 4,397 12.75%
2017 547 (547) - 4,294 12.75%
2016 528 (528) - 4,329 12.75%
2015 532 (532) - 4,173 12.75%
*Complete data for this schedule is not available prior to 2015.
158
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of State’s Share of OPEB Liability
Retiree Health Insurance Credit
Last 10 Fiscal Years*
(Dollars in thousands)
Employer’s
Employer’s proportionate share Plan fiduciary
Employer’s proportionate of the net OPEB net position as
proportion of share of the net liability (asset) as a a percentage of
the net OPEB OPEB liability Employer’s Plan fiduciary net percentage of its the total OPEB
(asset) (asset) covered payroll position covered payroll liability
2019 0.507311% $39,954 $563,479 $64,888 7.09% 61.89%
2018 0.515458% 40,877 574,972 60,615 7.11% 59.78%
*Complete data for this schedule is not available prior to 2018. Amounts presented for each fiscal year have a measurement date of
the previous fiscal year end.
Required Supplementary Information
Schedule of State’s Contributions
Retiree Health Insurance Credit
Last 10 Fiscal Years*
(Dollars in thousands)
Contributions in relation Contribution Contributions as a
Statutorily required to the statutorily deficiency Employer’s covered percentage of covered
contribution required contribution (excess) payroll payroll
2019 $6,425 $(6,413) $12 $561,580 1.14%
2018 6,434 (6,424) 10 563,479 1.14%
*Complete data for this schedule is not available prior to 2018.
159
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
North Dakota Public Employee Retirement System
Last 10 Fiscal Years*
(Dollars in thousands)
2019 2018 2017 2016
Total pension liability (asset)
Service cost $ 172,184 $ 164,018 $ 113,148 $ 126,444
Interest 294,701 279,835 269,771 243,285
Change of benef it terms - - - -
Diff erence betw een expected and actual experience (210,896) (65,346) (3,612) 15,915
Changes of assumptions (464,473) 125,225 741,492 108,139
Benef it payments, including refund of employee
contributions (197,758) (182,522) (162,992) (149,664)
Net change in total pension liability (asse t) (406,242) 321,210 957,807 344,119
Total pension liability (asset) - beginning 4,675,582 4,354,372 3,396,565 3,052,446
Total pension liability (asset) - e nding (a) $ 4,269,340 $ 4,675,582 $ 4,354,372 $ 3,396,565
Plan fiduciary net position
Contributions - employer $ 81,588 $ 80,727 $ 78,934 $ 77,080
Contributions - employee 78,213 77,486 76,007 74,219
Contributions - service credit repurchase 7,220 19,985 11,805 9,179
Contributions - other - - - -
Net investment income 159,824 249,165 311,761 11,334
Transf ers f rom other plans (5) (24) 32 23,575
Benef it payments, including refund of employee
contributions (197,758) (182,522) (162,992) (149,664)
Administrative expense (2,531) (2,473) (2,607) (2,538)
Ne t change in plan fiduciary net position 126,551 242,344 312,940 43,185
Plan f iduciary net position - beginning 2,970,180 2,727,836 2,414,896 2,371,711
Plan f iduciary net position - ending (b) $ 3,096,731 $ 2,970,180 $ 2,727,836 $ 2,414,896
Net pension liability (asset) - ending (a) - (b) $ 1,172,609 $ 1,705,402 $ 1,626,536 $ 981,669
Plan fiduciary net position as a percentage of the
total pension liability (asset) 72.53% 63.53% 62.65% 71.10%
Covered employee payroll $ 1,098,416 $ 1,075,958 $ 1,063,372 $ 1,048,548
Plan net pension liability (asset) as a percentage of
covered employee payroll 106.75% 158.50% 152.96% 93.62%
Notes to Schedule:
*Complete data for this schedule is not available prior to 2014.
Benefit Changes: There were no changes made in the plan provisions since the prior valuation.
Changes of Assumptions: There were no changes made in the actuarial assumptions since the July 1, 2017 valuation.
160
STATE OF NORTH DAKOTA
2015 2014
$ 104,158 $ 94,611
236,420 218,719
2 -
4,396 25,783
(76,152) -
(134,930) (119,886)
133,894 219,227
2,918,552 2,699,325
$ 3,052,446 $ 2,918,552
$ 70,842 $ 61,661
68,392 59,394
6,652 8,325
- -
81,537 316,630
- -
(134,930) (119,886)
(2,365) (2,211)
90,128 323,913
2,281,583 1,957,670
$ 2,371,711 $ 2,281,583
$ 680,735 $ 636,969
77.70% 78.18%
$ 973,536 $ 888,452
69.92% 71.69%
161
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
North Dakota Highway Patrolmen’s Retirement System
Last 10 Fiscal Years*
(Dollars in thousands)
2019 2018 2017 2016
Total pension liability (asset)
Service cost $ 2,818 $ 2,738 $ 2,701 $ 2,226
Interest 7,527 7,203 6,951 6,311
Change of benef it terms - - - -
Diff erence betw een expected and actual experience (68) (621) 22 40
Changes of assumptions 3,043 - 1,257 3,946
Benef it payments, including refund of employee
contributions (5,391) (4,981) (4,806) (4,713)
Net change in total pension liability (asse t) 7,929 4,339 6,125 7,810
Total pension liability (asset) - beginning 98,386 94,047 87,922 80,112
Total pension liability (asset) - e nding (a) $ 106,315 $ 98,386 $ 94,047 $ 87,922
Plan fiduciary net position
Contributions - employer $ 2,091 $ 2,153 $ 2,156 $ 2,127
Contributions - employee 1,412 1,453 1,456 1,436
Contributions - service credit repurchase 168 282 249 -
Contributions - other - - - -
Net investment income 4,251 6,716 8,500 317
Benef it payments, including refund of employee
contributions (5,391) (4,981) (4,806) (4,713)
Administrative expense (44) (30) (30) (32)
Ne t change in plan fiduciary net position 2,487 5,593 7,525 (865)
Plan f iduciary net position - beginning 78,929 73,336 65,811 66,676
Plan f iduciary net position - ending (b) $ 81,416 $ 78,929 $ 73,336 $ 65,811
Net pension liability (asset) - ending (a) - (b) $ 24,899 $ 19,457 $ 20,711 $ 22,111
Plan fiduciary net position as a percentage of the
total pension liability (asset) 76.58% 80.22% 77.98% 74.85%
Covered employee payroll $ 10,354 $ 10,737 $ 10,629 $ 10,527
Plan net pension liability (asset) as a percentage of
covered employee payroll 240.48% 181.21% 194.84% 210.04%
Notes to Schedule:
*Complete data for this schedule is not available prior to 2014.
Benefit Changes: There were no changes made in the plan provisions since the prior valuation.
Changes of Assumptions: There were no changes made in the actuarial assumptions since the July 1, 2017 valuation.
162
STATE OF NORTH DAKOTA
2015 2014
$ 2,038 $ 1,894
6,008 5,750
- -
984 (300)
395 -
(4,746) (3,784)
4,679 3,560
75,433 71,873
$ 80,112 $ 75,433
$ 2,002 $ 1,865
1,352 1,243
97 87
- -
2,335 9,240
(4,746) (3,784)
(31) (28)
1,009 8,623
65,667 57,044
$ 66,676 $ 65,667
$ 13,436 $ 9,766
83.23% 87.05%
$ 6 $ 9,348
132.44% 104.47%
163
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
Retirement Plan for the Employees of Job Service North Dakota
Last 10 Fiscal Years*
(Dollars in thousands)
2019 2018 2017 2016
Total pension liability (asset)
Service cost $ 70 $ 80 $ 56 $ 71
Interest 3,130 3,501 4,130 4,281
Change of benef it terms - - - -
Diff erence betw een expected and actual experience (505) (310) (1,648) (2,007)
Changes of assumptions - 5,812 4,421 70
Benef it payments, including refund of employee
contributions (4,627) (4,583) (4,534) (4,601)
Net change in total pension liability (asse t) (1,932) 4,500 2,425 (2,186)
Total pension liability (asset) - beginning 68,129 63,629 61,204 63,390
Total pension liability (asset) - e nding (a) $ 66,197 $ 68,129 $ 63,629 $ 61,204
Plan fiduciary net position
Contributions - employer $ - $ - $ - $ -
Contributions - employee 29 33 39 44
Contributions - service credit repurchase - - - -
Contributions - other - - - -
Net investment income 6,230 2,919 5,239 4,840
Benef it payments, including refund of employee
contributions (4,627) (4,583) (4,534) (4,601)
Administrative expense (17) (46) (13) (32)
Ne t change in plan fiduciary net position 1,615 (1,677) 731 251
Plan f iduciary net position - beginning 95,588 97,265 96,534 96,283
Plan f iduciary net position - ending (b) $ 97,203 $ 95,588 $ 97,265 $ 96,534
Net pension liability (asset) - ending (a) - (b) $ (31,006) $ (27,459) $ (33,636) $ (35,330)
Plan fiduciary net position as a percentage of the
total pension liability (asset) 146.84% 140.30% 152.86% 157.72%
Covered employee payroll $ 417 $ 417 $ 499 $ 567
Plan net pension liability (asset) as a percentage of
covered employee payroll -7443.56% -6590.37% -6746.56% -6256.45%
Notes to Schedule:
*Complete data for this schedule is not available prior to 2014.
Benefit Changes: There were no changes made in the plan provisions since the prior valuation.
Changes of Assumptions: The Board approved the following changes to the actuarial assumptions beginning with the July 1, 2018
actuarial valuation:
• The investment return assumption was lowered from 5.7 to 4.75 percent.
All other actuarial assumptions used in the July 1, 2018 are the same as the last actuarial valuation as of July 1, 2017.
164
STATE OF NORTH DAKOTA
2015 2014
$ 128 $ 88
5,026 5,107
- -
(1,806) (1,607)
(310) -
(4,694) (4,595)
(1,656) (1,007)
65,046 66,053
$ 63,390 $ 65,046
$ - $ -
50 56
- -
- -
3,260 11,888
(4,694) (4,595)
(30) (31)
(1,414) 7,318
97,697 90,379
$ 96,283 $ 97,697
$ (32,893) $ (32,651)
151.89% 150.20%
$ 791 $ 843
-4160.24% -3874.93%
165
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
North Dakota Teachers’ Fund for Retirement
Last 10 Fiscal Years*
(Dollars in thousands)
2019 2018 2017 2016
Total pension liability (asset)
Service cost $ 77,756 $ 78,041 $ 75,476 $ 68,239
Interest 296,876 287,375 276,412 265,440
Change of benef it terms - - - -
Diff erence betw een expected and actual experience (23,495) (27,939) (10,749) (8,093)
Changes of assumptions - - - -
Benef it payments, including refund of employee
contributions (221,228) (207,979) (196,516) (185,969)
Net change in total pension liability (asse t) 129,909 129,498 144,623 139,617
Total pension liability (asset) - beginning 3,863,515 3,734,017 3,589,394 3,449,777
Total pension liability (asset) - e nding (a) $ 3,993,424 $ 3,863,515 $ 3,734,017 $ 3,589,394
Plan fiduciary net position
Contributions - employer $ 89,445 $ 86,676 $ 86,059 $ 82,840
Contributions - employee 82,429 79,878 79,309 76,343
Contributions - service credit repurchase 1,917 2,181 2,553 2,768
Contributions - other 159 194 236 45
Net investment income 135,043 211,345 266,688 8,239
Benef it payments, including refund of employee
contributions (221,228) (207,979) (196,516) (185,969)
Administrative expense (2,251) (2,129) (2,173) (1,852)
Ne t change in plan fiduciary net position 85,514 170,166 236,156 (17,586)
Plan f iduciary net position - beginning 2,530,657 2,360,491 2,124,335 2,141,921
Plan f iduciary net position - ending (b) $ 2,616,171 $ 2,530,657 $ 2,360,491 $ 2,124,335
Net pension liability (asset) - ending (a) - (b) $ 1,377,253 $ 1,332,858 $ 1,373,526 $ 1,465,059
Plan fiduciary net position as a percentage of the
total pension liability (asset) 65.50% 65.50% 63.20% 59.20%
Covered employee payroll $ 701,528 $ 679,809 $ 674,971 $ 649,725
Plan net pension liability (asset) as a percentage of
covered employee payroll 196.10% 196.10% 203.50% 225.50%
Notes to Schedule:
*Complete data for this schedule is not available prior to 2014.
**Restated in 2015 due to GASB 68 implementation.
Changes of Assumptions: In 2015, amounts reported as changes of assumptions resulted primarily from a decrease in the
investment return assumption from 8% to 7.75% and an updated mortality improvement scale.
166
STATE OF NORTH DAKOTA
2015 2014
$ 60,618 $ 56,752
249,064 237,821
- -
2,209 9,347
171,325 -
(172,239) (162,259)
310,977 141,661
3,138,800 2,997,139
$ 3,449,777 $ 3,138,800
$ 78,422 $ 62,355
72,268 56,555
1,601 2,034
172 48
73,205 294,246
(172,239) (162,259)
(1,923) (1,586)
51,506 251,393
2,090,415 1,839,584
$ 2,141,921 $ 2,090,977
$ 1,307,856 $ 1,047,823
62.10% 66.60%
$ 615,105 $ 580,053
212.60% 180.60%
167
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Changes in Net Other Post Employment Benefit Liability and Related Ratios
Retiree Health Insurance Credit Fund
Last 10 Fiscal Years*
(Dollars in thousands)
2019 2018 2017
Total OPEB liability (asset)
Service cost $ 3,828 $ 3,767 $ 3,430
Interest 15,217 14,485 14,327
Change of benef it terms - - -
Difference betw een expected and actual experience (1,374) 2,732 (2,231)
Changes of assumptions 5,002 - 8,861
Benef it payments, including ref und of employee
contributions (11,505) (11,016) (10,014)
Net change in total OPEB liability (asset) 11,168 9,968 14,373
Total OPEB liability (asset) - beginning 206,663 196,695 182,322
Total OPEB liability (asset) - ending (a) $ 217,831 $ 206,663 $ 196,695
Plan fiduciary net position
Contributions - employer $ 12,977 $ 12,834 $ 12,576
Contributions - employee 16 16 16
Contributions - service credit repurchase 377 747 464
Contributions - other - - -
Net investment income 8,178 8,211 12,074
Benef it payments, including ref und of employee
contributions (11,505) (11,016) (10,014)
Administrative expense (437) (480) (443)
Net change in plan fiduciary net position 9,606 10,312 14,673
Plan f iduciary net position - beginning 127,906 117,594 102,921
Plan f iduciary net position - ending (b) $ 137,512 $ 127,906 $ 117,594
Net OPEB liability (asset) - ending (a) - (b) $ 80,319 $ 78,757 $ 79,101
Plan f iduciary net position as a percentage of the
total OPEB liability (asset) 63.13% 61.89% 59.78%
Covered employee payroll $ 1,115,858 $ 1,094,217 $ 1,081,841
Plan net OPEB liability (asset) as a percentage of
covered employee payroll 7.20% 7.20% 7.31%
Notes to Schedule:
*Complete data for this schedule is not available prior to 2017.
Benefit Changes: There were no changes made in the plan provisions since the prior valuation.
Changes of Assumptions: There were no changes made in the actuarial assumptions since the July 1, 2017 valuation
168
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Changes in Net Other Post Employment Benefit Liability and Related Ratios
Met Life Insurance Plan
Last 10 Fiscal Years*
(Dollars in thousands)
2019 2018
Total OPEB liability (asset)
Service cost $ 4 $ 4
Interest 42 43
Change of benef it terms - -
Difference betw een expected and actual experience - -
Changes of assumptions - -
Benef it payments, including ref und of employee
contributions (84) (80)
Net change in total OPEB liability (asset) (38) (33)
Total OPEB liability (asset) - beginning 1,491 1,524
Total OPEB liability (asset) - ending (a) $ 1,453 $ 1,491
Plan fiduciary net position
Contributions - employer $ 84 $ 80
Contributions - employee - -
Contributions - service credit repurchase - -
Contributions - other - -
Net investment income - -
Benef it payments, including ref und of employee
contributions (84) (80)
Administrative expense - -
Net change in plan fiduciary net position - -
Plan f iduciary net position - beginning - -
Plan f iduciary net position - ending (b) $ - $ -
Net OPEB liability (asset) - ending (a) - (b) $ 1,453 $ 1,491
Plan f iduciary net position as a percentage of the
total OPEB liability (asset) 0.00% 0.00%
Covered employee payroll n/a n/a
Plan net OPEB liability (asset) as a percentage of
covered employee payroll n/a n/a
*Complete data for this schedule is not available prior to 2018.
169
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Employer Contributions
Last 10 Fiscal Years*
(Dollars in thousands)
ND Public Employees Retirement System
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially
determined
contribution $127,129 $125,714 $116,564 $124,336 $107,514 $107,864 $97,985 $91,458 $82,910 $54,158
Contribution
in relation
to the
actuarially
determined
contribution 81,588 80,727 78,934 77,081 70,843 61,661 48,847 38,006 32,278 30,253
Contribution
deficiency
(excess) $45,541 $44,987 $37,630 $47,255 $36,671 $46,203 $49,138 $53,452 $50,632 $23,905
Covered
payroll 1,098,416 1,075,958 1,063,372 1,048,548 973,536 888,452 800,878 804,169 769,710 697,737
Contributions
as a
percentage
of covered
payroll 7.43% 7.50% 7.42% 7.35% 7.28% 6.94% 6.10% 4.73% 4.19% 4.34%
Highway Patrolmen’s Retirement System
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially
determined
contribution $2,936 $2,949 $3,060 $2,307 $2,201 $2,348 $2,191 $2,171 $1,744 $1,313
Contribution
in relation
to the
actuarially
determined
contribution 2,091 2,153 2,156 2,127 2,002 1,865 1,586 1,423 1,286 1,197
Contribution
deficiency
(excess) $845 $796 $904 $180 $199 $483 $605 $748 $458 $116
Covered
payroll 10,354 10,737 10,629 10,527 10,146 9,348 8,167 8,002 7,738 7,009
Contributions
as a
percentage
of covered
payroll 20.20% 20.05% 20.28% 20.21% 19.73% 19.95% 19.42% 17.78% 16.62% 17.08%
170
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Employer Contributions
Last 10 Fiscal Years*
(Dollars in thousands)
Job Service North Dakota
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially
determined
contribution $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Contribution
in relation
to the
actuarially
determined
contribution - - - - - - - - - -
Contribution
deficiency
(excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Covered
payroll 417 417 499 565 791 843 1,011 1,163 1,266 1,487
Contributions
as a
percentage
of covered
payroll 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
ND Teachers’ Fund for Retirement
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially
determined
contribution $90,778 $88,307 $89,231 $84,724 $71,168 $59,513 $52,396 $69,374 $65,113 $52,053
Contribution
in relation
to the
actuarially
determined
contribution 89,445 86,676 86,059 82,840 78,422 62,355 59,301 46,126 44,545 39,837
Contribution
deficiency
(excess) $1,333 $1,631 $3,172 $1,884 $(7,254) $(2,842) $(6,905) $23,248 $20,568 $12,216
Covered
payroll 701,528 679,809 674,971 649,725 615,105 580,053 551,656 527,156 509,091 482,868
Contributions
as a
percentage
of covered
payroll 12.75% 12.75% 12.75% 12.75% 12.75% 10.75% 10.75% 10.75% 8.75% 8.75%
171
STATE OF NORTH DAKOTA
Required Supplementary Information
Schedule of Employer Contributions
Last 10 Fiscal Years*
(Dollars in thousands)
Retiree Health Insurance Credit Plan
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially
determined
contribution $12,707 $12,252 11,696 7,544 6,439 7,014 7,411 7,263 7,053 7,199
Contribution
in relation
to the
actuarially
determined
contribution 12,977 12,835 12,575 12,350 11,479 10,710 9,960 9,388 8,930 8,393
Contribution
deficiency
(excess) $(270) $(583) $(879) $(4,806) $(5,040) $(3,696) $(2,549) $(2,125) $(1,877) $(1,194)
Covered
payroll 1,115,858 1,094,217 1,081,841 1,142,375 1,052,657 1,001,204 914,368 824,855 828,978 793,634
Contributions
as a
percentage
of covered
payroll 1.16% 1.17% 1.16% 1.08% 1.09% 1.07% 1.09% 1.14% 1.08% 1.06%
172
STATE OF NORTH DAKOTA
Required Supplementary Information
Information About the State’s Pension and Other Post Employment Benefit Plans
For the Fiscal Year Ended June 30, 2019
PERS
Benefit Changes The interest rate earned on member contributions will decrease from 7.25 percent to 7.00
percent effective January 1, 2020 (based on the adopted decrease in the investment
return assumption). New Main System and Public Safety members who are hired on or
after January 1, 2020 will have a benefit multiplier of 1.75 percent (compared to the
current benefit multiplier of 2.00 percent). The fixed employer contribution for new
members of the Main System will increase from 7.12 percent to 8.26 percent. For
members who terminate after December 31, 2019, final average salary is the higher of
the final average salary calculated on December 31, 2019 or the average salary earned
in the three highest periods of twelve consecutive months employed during the last 180
months of employment. There have been no other changes in plan provisions since the
previous actuarial valuation as of July 1, 2018.
Changes of Assumptions The Board approved the following changes to the actuarial assumptions beginning with
the July 1, 2019 actuarial valuation:
x The investment return assumption was lowered from 7.75 to 7.5 percent for the July
1, 2019 valuation
All other actuarial assumptions used in the July 1, 2019 are the same as the last actuarial
valuation as of July 1, 2018.
HPRS
Benefit Changes There were no changes made in the plan provisions since the prior valuation.
Changes of Assumptions The Board approved the following changes to the actuarial assumptions beginning with
the July 1, 2019 actuarial valuation:
x The investment return assumption was lowered from 7.75 to 7.5 percent for the July
1, 2019 valuation
All other actuarial assumptions used in the July 1, 2019 are the same as the last actuarial
valuation as of July 1, 2018.
JSND
Benefit Changes There were no changes made in the plan provisions since the prior valuation.
Changes of Assumptions There were no changes made in in the actuarial assumptions since the July 1, 2019
valuation.
RHIC
Benefit Changes Beginning January 1, 2020, members first enrolled in the NDPERS Main System and the
Defined Contribution Plan on or after that date will not be eligible to participate in RHIC
Changes of Assumptions The Board approved the following changes to the actuarial assumptions beginning with
the July 1, 2019 actuarial valuation:
x The investment return assumption was lowered from 7.5 to 7.25 percent for the July
1, 2019 valuation
All other actuarial assumptions used in the July 1, 2019 are the same as the last actuarial
valuation as of July 1, 2018.
173
STATE OF NORTH DAKOTA
Required Supplementary Information
Information About the State’s Pension and Other Post Employment Benefit Plans
For the Fiscal Year Ended June 30, 2019
Schedule of Employer Contributions
PERS
Valuation Date July 1, 2019
Actuarial Cost Method Entry Age Normal Method
Amortization Method Level Percentage of Payroll, Open Period
Assumed annual payroll growth of 3.75% (3.25% for Judges)
Remaining Amortization
Period 20 Years
Asset Valuation Method 5-Year smoothed marked
Inflation 2.50%
Salary Increases 4.00% to 20.00% including inflation
Investment Rate of Return 7.75%
Retirement Age Age-based table of rates that are specific to the type of eligibility condition
Mortality For June 30, 2019 and June 30, 2018, mortality rates for active members, inactive
members and healthy retirees were based on the RP-2000 Combined Healthy Mortality
Table, set back two years for males and three years for females, projected generationally
using the SSA 2014 Intermediate Cost scale from 2014. For disabled retirees, mortality
rates were based on the RP-2000 Disabled Mortality Table, set back one year for males
(no setback for females) multiplied by 125%.
Other Notes Main System and Public Safety members hired on and after January 1, 2020 are to have
a 1.75% benefit multiplier.
The economic assumptions (excluding salary increases) and the asset smoothing method
were updated beginning with the actuarial valuation as of July 1, 2017 based on a review
performed by GRS. All other actuarial assumptions were adopted by the Board based on
an experience study covering the period July 1, 2009, through June 30, 2014.
The employer rates to the System are the statutory/Board approved contribution rates of
7.12% of payroll for the Main System, 17.52% for the Judges System, 9.81% for Public
Safety with prior Main service System, and 7.93% for the Public Safety without prior Main
System service System.
HPRS
Valuation Date July 1, 2019
Actuarial Cost Method Entry Age Normal Method
Amortization Method Level Percentage of Payroll, Open Period
Assumed annual payroll growth of 3.75%
Remaining Amortization
Period 20 Years
Asset Valuation Method 5-Year smoothed marked
Inflation 2.50%
174
STATE OF NORTH DAKOTA
Required Supplementary Information
Information About the State’s Pension and Other Post Employment Benefit Plans
For the Fiscal Year Ended June 30, 2019
Salary Increases Service-based table for members with less than five years of service and age-based
table for members with more than five years of service.
Investment Rate of Return 7.75%
Retirement Age Age-based table of rates that are specific to the type of eligibility condition
Mortality For June 30, 2019, mortality rates for active members, inactive members and healthy
retirees were based on the RP-2000 Combined Healthy Mortality Table, set back two
years for males and three years for females, projected generationally using the SSA 2014
Intermediate Cost scale from 2014. For disabled retirees, mortality rates were based on
the RP-2000 Disabled Mortality Table, set back one year for males (no setback for
females) multiplied by 125%.
Other Notes There were no benefit changes during the year.
The economic assumptions (excluding salary increases) and the asset smoothing method
were updated beginning with the actuarial valuation as of July 1, 2017 based on a review
performed by GRS. All other actuarial assumptions were adopted by the Board based on
an experience study covering the period July 1, 2009, through June 30, 2014.
The employer rate to the System is the statutory contribution rate of 19.70%of payroll.
JSND
Valuation Date July 1, 2019
Actuarial Cost Method Frozen Initial Liability (Aggregate since no initial Liability remains)
Amortization Method Not Applicable
Asset Valuation Method 5-Year smoothed marked
Inflation 2.50%
COLA 2.50%
Salary Increases 3.50%
Investment Rate of Return 4.75%
Retirement Age Age-based table of rates that are specific to the type of eligibility condition
Mortality For June 30, 2019, mortality rates for active members, inactive members and healthy
retirees were based on the RP-2000 Combined Healthy Mortality Table, set back two
years for males and three years for females, projected generationally using the SSA 2014
Intermediate Cost scale from 2014. For disabled retirees, mortality rates were based on
the RP-2000 Disabled Mortality Table, set back one year for males (no setback for
females) multiplied by 125%.
Other Notes There were no benefit changes during the year.
The economic assumptions (excluding salary increases) were updated beginning with the
actuarial valuation as of July 1, 2017 based on a review performed by GRS. The Board
approved lowering the investment return assumption from 5.70% to 4.75% beginning with
the July 1, 2018, actuarial valuation. All other actuarial assumptions were adopted by the
Board based on an experience study covering the period July 1, 2009 through June 30,
2014
The System has assets in excess of the present value of future benefits. Therefore, no
employer contributions are being made
175
STATE OF NORTH DAKOTA
Required Supplementary Information
Information About the State’s Pension and Other Post Employment Benefit Plans
For the Fiscal Year Ended June 30, 2019
TFFR:
Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed
Remaining amortization
Period 24 years
Asset valuation method 5-year smoothed market
Inflation 2.75%; decreased from 3% prior to July 1, 2015.
Salary increases 4.25% - 14.5%, including inflation and productivity; 4.5% - 14.75% prior to July 1, 2015.
Investment rate of return 7.75%, net of investment expenses, including inflation. Rate was decreased from 8%
beginning July 1, 2015.
Retirement age In the 2015 valuation, rates of retirement were changed to better reflect anticipated future
experience. In the 2010 valuation, expected retirement ages of plan members were
adjusted to more closely reflect actual experience.
Mortality In the 2015 valuation, assumed life expectancies were adjusted as a result of adopting
the RP-2014 mortality tables with generational improvement. In prior years, those
assumptions were based on percentages of GRS post termination non-disabled tables
and RP-2000 disabled-life tables.
RHIC
Valuation Date July 1, 2019
Actuarial Cost Method Entry Age Normal Method
Amortization Method Level Percentage of Payroll, 40-year closed Period (beginning July 1, 1990) for fiscal year
2019 contribution.
Assumed annual payroll growth of 3.75%
Remaining Amortization
Period 12 years remaining as of July 1, 2018
Asset Valuation Method 5-Year smoothed marked
Inflation 2.50%
Salary Increases Not Applicable
Investment Rate of Return 7.50%
Retirement Age Age-based table of rates that are specific to the type of eligibility condition
Mortality For June 30, 2019 and June 30, 2018, mortality rates for active members, inactive
members and healthy retirees were based on the RP-2000 Combined Healthy Mortality
Table, set back two years for males and three years for females, projected generationally
using the SSA 2014 Intermediate Cost scale from 2014. For disabled retirees, mortality
rates were based on the RP-2000 Disabled Mortality Table, set back one year for males
(no setback for females) multiplied by 125%.
Other Notes There were no benefit changes during the year.
The economic assumptions (excluding salary increases) and the asset smoothing method
were updated beginning with the actuarial valuation as of July 1, 2017 based on a review
176
STATE OF NORTH DAKOTA
Required Supplementary Information
Information About the State’s Pension and Other Post Employment Benefit Plans
For the Fiscal Year Ended June 30, 2019
performed by GRS. All other actuarial assumptions were adopted by the Board based on
an experience study covering the period July 1, 2009, through June 30, 2014.
The employer rate to the System is the statutory contribution rate of 1.14%of payroll.
Schedule of Investment Returns
Public Employees Highway Retiree Health
Retirement Patrolmen's Job Service Teachers' Fund Insurance Credit
System Retirement System North Dakota for Retirement Fund
2019 5.69% 5.39% 7.00% 5.46% 6.75%
2018 9.21% 9.16% 3.32% 9.15% 7.01%
2017 13.01% 12.93% 5.85% 12.81% 11.75%
2016 0.49% 0.48% 5.14% 0.39% 0.83%
2015 3.61% 3.66% 3.41% 3.56% 0.00%
2014 16.29% 16.20% 13.46% 16.35% 0.00%
2013 13.52% 13.38% 12.07% 13.60% 0.00%
This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
Met Life Insurance Plan:
Actuarial cost method Entry age normal actuarial cost method was used in the valuation.
Changes of assumptions The following changes were made to the actuarial assumptions and methods effecting
July 1, 2018
x The benefits valued were changed from retiree medical and life benefits to life benefits
only.
x The discount rate is 2.98 percent based on the S&P Municipal Bond 20 Year High
Grade Rate Index as of June 30, 2018, compared to the prior Statement No. 45
discount rate of 4.5%.
x The funding method was changed from Projected Unit Credit to Entry Age Normal.
x Mortality was updated from table RP-2-14 adjusted to 2006 and projected using scale
MP-2015 to table RP-2014 adjusted to 2006 and projected using scale MP-2017.
177
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178
State of North Dakota
Combining Financial Statements
179
STATE OF NORTH DAKOTA
Nonmajor Governmental Funds
Permanent Fund
A permanent fund is used to report resources that are legally restricted to the extent than only
earnings, and not principal, may be used to for the benefit of the government or its citizens.
956-Coal Development Permanent Fund
The Coal Development Fund reports resources that are constitutionally committed for distribution
to other state funds and for making loans to energy impacted entities and school districts.
410-Veterans’ Postwar Trust Fund
The Veterans’ Postwar Trust Fund reports resources that are constitutionally committed to be
utilized for programs which must be of benefit and service to veterans, who are defined by
legislative enactment, or their dependents.
Debt Service Funds
A debt service fund is used to account for accumulation for resources for, and the payment of,
principal and interest on long-term debt.
BUILDING AUTHORITY
919 - Building Authority Debt Service Fund
Account for accumulation of resources for, and the payment of, principal and interest on bonds
issued by the North Dakota Building Authority.
DEPARTMENT OF TRANSPORTATION
949 - Department of Transportation Debt Service Fund
Account for accumulation of resources for, and the payment of, principal and interest on bonds
issued by the Department of Transportation.
180
STATE OF NORTH DAKOTA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2019
Perm Trust Fund Debt Service Funds
Total
Coal Veteran's Nonmajor
Development Postwar Building Dept. of Governmental
Trust Fund Trust Fund Total Authority Trans. Total Funds
ASSETS
Cash Deposits at the Bank of ND $ 279,990 $ 134,646 $ 414,636 $ 35,000 $ 85,831 $ 120,831 $ 535,467
Cash and Cash Equivalents - 85,943 85,943 - - - 85,943
Investments at the Bank of ND - - - 663,000 - 663,000 663,000
Investments 18,540,107 6,514,050 25,054,157 - - - 25,054,157
Accounts Receivable - Net - 50 50 - - - 50
Taxes Receivable - Net 113,376 - 113,376 - - - 113,376
Interest Receivable - Net 154,655 12,087 166,742 - - - 166,742
Due from Other Funds - 15 15 - - - 15
Loans and Notes Receivable - Net 52,976,356 - 52,976,356 - - - 52,976,356
Total Assets 72,064,484 6,746,791 78,811,275 698,000 85,831 783,831 79,595,106
DEFERRED OUTFLOWS OF RESOURCES
Total Deferred Outflows of Resources - - - - - - -
Total Assets and Deferred Outflows of
Resources $ 72,064,484 $ 6,746,791 $ 78,811,275 $ 698,000 $ 85,831 $ 783,831 $ 79,595,106
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable 1,633 11,121 12,754 - - - 12,754
Securities Lending Collateral 1,613,262 - 1,613,262 - - - 1,613,262
Due to Other Funds 153,238 325 153,563 - - - 153,563
Total Liabilities 1,768,133 11,446 1,779,579 - - - 1,779,579
DEFERRED INFLOWS OF RESOURCES
Total Deferred Inflows of Resources - - - - - - -
Fund Balances:
Nonspendable 70,213,873 6,337,408 76,551,281 - - - 76,551,281
Restricted - - - 698,000 85,831 783,831 783,831
Committed 82,478 397,937 480,415 - - - 480,415
Total Fund Balances 70,296,351 6,735,345 77,031,696 698,000 85,831 783,831 77,815,527
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance $ 72,064,484 $ 6,746,791 $ 78,811,275 $ 698,000 $ 85,831 $ 783,831 $ 79,595,106
181
STATE OF NORTH DAKOTA
Combining Statement of Revenues, Expenditures and
Changes in Fund Balance
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2019
Debt Service Funds
Total
Coal Veteran's Nonmajor
Development Post War Building Dept. of Governmental
Trust Fund Trust Fund Total Authority Trans. Total Funds
REVENUES
Oil, Gas, and Coal Taxes $ 1,576,908 $ - $ 1,576,908 $ - $ - $ - $ 1,576,908
Licenses, Permits and Fees - 9,820 9,820 - - - 9,820
Intergovernmental - - - - 4,300,620 4,300,620 4,300,620
Sales and Services - 8,460 8,460 - - - 8,460
Interest and Investment Income 1,224,477 430,274 1,654,751 3,000 1,134 4,134 1,658,885
Miscellaneous - 38,046 38,046 - - - 38,046
Total Revenues 2,801,385 486,600 3,287,985 3,000 4,301,754 4,304,754 7,592,739
EXPENDITURES
Current:
General Government 39,819 46,190 86,009 - - - 86,009
Health and Human Services - 104,278 104,278 - - - 104,278
Debt Service:
Principal - - - 5,200,000 4,820,000 10,020,000 10,020,000
Interest and Other Charges - - - 1,072,000 495,650 1,567,650 1,567,650
Total Expenditures 39,819 150,468 190,287 6,272,000 5,315,650 11,587,650 11,777,937
Revenues over (under) Expenditures 2,761,566 336,132 3,097,698 (6,269,000) (1,013,896) (7,282,896) (4,185,198)
OTHER FINANCING SOURCES (USES)
Transfers In - - - 6,291,000 1,014,907 7,305,907 7,305,907
Transfers Out (2,056,507) - (2,056,507) - - - (2,056,507)
Total Other Financing Sources (Uses) (2,056,507) - (2,056,507) 6,291,000 1,014,907 7,305,907 5,249,400
Net Change in Fund Balances 705,059 336,132 1,041,191 22,000 1,011 23,011 1,064,202
Fund Balances - Beginning of Year 69,591,292 6,399,213 75,990,505 676,000 84,820 760,820 76,751,325
Fund Balances - End of Year $ 70,296,351 $ 6,735,345 $ 77,031,696 $ 698,000 $ 85,831 $ 783,831 $ 77,815,527
182
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183
STATE OF NORTH DAKOTA
Nonmajor Enterprise Funds
Enterprise funds are used to account for operations that are financed and operated in a manner
similar to private business enterprises—where the intent of the State is that the costs of providing
goods or services to the general public on a continuing basis be financed or recovered primarily
through user charges; or where the State has decided that periodic determination of net income is
appropriate for accountability purposes.
BANK OF NORTH DAKOTA
907 – School Construction Assistance Revolving Loan Fund
Fund used to provide low-interest school construction loans.
934 – Infrastructure Revolving Loan Fund
Fund used to provide loans to political subdivisions for essential infrastructure projects.
954 - Addiction Counselor Internship Loan Program
Fund used to provide loans to qualified individuals participating in a paid or unpaid internship at a
licensed substance abuse treatment facility in North Dakota in order to obtain licensure as an
addiction counselor.
984 – Medical Facility Infrastructure Loan Program
Fund used to make loans to medical facilities to conduct construction that improves the health care
infrastructure in the state or improves access to existing nonprofit health care providers in the state.
985 – Rebuilders Loan Program
Fund used to make loans to North Dakota 2011 flood-damaged homeowners to provide financial
assistance needed to repair their home.
BEGINNING FARMER REVOLVING LOAN
973 - Beginning Farmer Revolving Loan Fund
Fund used to make loans to North Dakota beginning farmers for the purchase of agricultural real
estate.
BONDING
210 (924) - State Bonding Fund
Fund used to maintain the bonding of public employees and officials of the state, county, city or other
unit of local government.
COMMUNITY WATER FACILITY LOAN
974 - Community Water Facility Loan Fund
Accounts for supplementary financing in conjunction with federal moneys available to improve
adequate water supplies.
FIRE AND TORNADO
211 (923) - State Fire and Tornado Fund
Accounts for state agencies and political subdivisions to insure against loss to the public buildings,
fixtures and permanent contents therein, through fire, lightning, windstorm, etc.
184
Nonmajor Enterprise Funds
GUARANTEED STUDENT LOAN
969 - North Dakota Guaranteed Student Loan
Accounts for the revenues and expenses associated with the administration, development and
operation of the guaranteed loan program.
HIT PLANNING LOAN FUND
987 – HIT Planning Loan Fund
Fund to provide low-interest loans to health care entities to improve health information technology
infrastructure.
INFORMATION TECHNOLOGY DEPARTMENT
408 (903) - Edutech Fund
Fund used for professional development sessions and presentations by the Information and
Technology Department.
476 (908) – SW Interoperable Radio Network Fund
Fund used for a radio broadcasting system for the state that enables seamless interoperable
communications from local, state, and federal levels.
MILL AND ELEVATOR
970 – Mill and Elevator
Accounts for revenues and expenditures associated with the operation of the Mill and Elevator.
PERS UNIFORM GROUP INSURANCE
980 - Public Employees Retirement System Group Insurance
Accounts for the administrative revenues and expenses associated with this insurance purchasing
pool.
ROUGHRIDER INDUSTRIES
926 - Roughrider Industries
Accounts for the revenues and expenses associated with the operation, manufacture and sale of
products made by the prison inmates.
STATE FAIR
601 (977) - State Fair
Accounts for revenues and expenditures associated with the operation of the State Fair.
STATE LOTTERY FUND
966 (292) - State Lottery Fund
Accounts for operations of the North Dakota lottery.
STUDENT LOAN
975 - North Dakota Student Loan Trust
Accounts for loans to students in post secondary education. The trust acquires eligible loans
guaranteed or insured by the United States government or the North Dakota Guaranteed Student
Loan Program.
UNEMPLOYMENT COMPENSATION FUND
967 - Job Service-Expendable Trust Fund
Accounts for State unemployment taxes collected from employers for the purpose of paying
unemployment benefits.
185
STATE OF NORTH DAKOTA
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2019
Addiction Beginning Community
Counselor Farmer Water Fire Infrastructure
Internship Revolving Facility and Guaranteed HIT Planning Revolving
Loan Loan Bonding Loan Edutech Tornado Student Loan Loan Fund Loan Fund
ASSETS
Current Assets:
Cash Deposits at the Bank of ND $ 79,910 $ 5,548,000 $ 136,008 $ 14,005,000 $ 1,038,844 $ 243,813 $ 42,124,746 $ - $ 5,573,000
Cash and Cash Equivalents - - 1,621,474 - - 2,270,428 - - -
Investments at the Bank of ND - - - - - - - - -
Investments - - 1,968,177 - - 20,414,695 - - -
Accounts Receivable - Net - - 134,891 - 55,980 16,359 - - -
Interest Receivable - Net 1,081 - 28,111 275,000 - 146,703 - 3,399 761,000
Intergovernmental Receivable - Net - - - - - - - - -
Due from Other Funds - - - - 12,000 - 773,515 - -
Prepaid Items - 2,449,000 - - - 304,945 - - -
Inventory - - - - - - - - -
Loans and Notes Receivable - Net 9,978 - - 744,000 - - - 1,205,166 4,449,000
Other Assets - - - - - - - - -
Restricted Cash at the Bank of ND - - - - - - 131,595 4,717,323 -
Restricted Cash and Cash Equivalents - - - - - - - - -
Restricted Investments at the Bank of ND - - - - - - - - -
Restricted Loans Receivable - Net - - - - - - - - -
Total Current Assets 90,969 7,997,000 3,888,661 15,024,000 1,106,824 23,396,943 43,029,856 5,925,888 10,783,000
Noncurrent Assets:
Loans and Notes Receivable - Net 100,482 - - 20,314,000 - - - 3,386,324 80,111,000
Other Noncurrent Assets - 3,912,000 - - - - - - -
Capital Assets:
Nondepreciable - - - - - - - - -
Depreciable, Net - - - - 33,428 - - - -
Total Noncurrent Assets 100,482 3,912,000 - 20,314,000 33,428 - - 3,386,324 80,111,000
Total Assets 191,451 11,909,000 3,888,661 35,338,000 1,140,252 23,396,943 43,029,856 9,312,212 90,894,000
DEFERRED OUTFLOWS OF RESOURCES
Derived from Pensions - - 11,566 - - 274,243 - - -
Derived from OPEB - - 359 - - 9,517 - - -
Total Deferred Outflows of Resources - - 11,925 - - 283,760 - - -
LIABILITIES
Current Liabilities:
Accounts Payable - - 131 - 2,106 57,879 - 6,251 -
Accrued Payroll - - 4,643 - - 61,887 - - -
Securities Lending Collateral - - 8,340 - - 70,368 - - -
Interest Payable - - 1,195 - - 8,163 - - -
Intergovernmental Payable - - - - - 7,062 4,487,595 - -
Due to Other Funds - - 17 27,000 1,252 - 728,338 - 97,000
Amounts Held in Custody for Others - - - - - - - - -
Claims/Judgments Payable - - 144,209 - - 677,834 - - -
Compensated Absences Payable - - 18 - - 1,115 - - -
Bonds Payable - - - - - - - - -
Unearned Revenue - - - - - - - - -
Other Current Liabilities - - - - - 112,936 - - -
Total Current Liabilities - - 158,553 27,000 3,358 997,244 5,215,933 6,251 97,000
Noncurrent Liabilities:
Compensated Absences Payable - - 341 - - 21,191 - - -
Bonds Payable - - - - - - - - -
Net Pension Liability - - 25,521 - - 609,339 - - -
Net Pension OPEB - - 312 - - 8,166 - - -
Other Noncurrent Liabilities - - - - - - 18,273,765 - -
Total Noncurrent Liabilities - - 26,174 - - 638,696 18,273,765 - -
Total Liabilities - - 184,727 27,000 3,358 1,635,940 23,489,698 6,251 97,000
DEFERRED INFLOWS OF RESOURCES
Increase in Fair Value of Hedging Derivatives - - - - - - - - -
Derived from Pensions - - 1,519 - - 35,861 - - -
Derived from OPEB - - 48 - - 1,351 - - -
Total Deferred Inflows of Resources - - 1,567 - - 37,212 - - -
Net Position
Net Investment in Capital Assets - - - - - - - - -
Restricted for:
Debt Service - - - - - - - - -
Unemployment Compensation - - - - - - - - -
Other - - - - - - - - -
Unrestricted 191,451 11,909,000 3,714,292 35,311,000 1,136,894 22,007,551 19,540,158 9,305,961 90,797,000
Total Net Position $ 191,451 $ 11,909,000 $ 3,714,292 $ 35,311,000 $ 1,136,894 $ 22,007,551 $ 19,540,158 $ 9,305,961 $ 90,797,000
186
Medical PERS School
Interoperable Facility Uniform Rebuilders Construction State
Radio Infrastructure Mill and Group Loan Roughrider Assistance State Lottery Student Unemployment
Network Fund Loan Fund Elevator Insurance Program Industries Loan Fund Fair Fund Loan Compensation Total
$ 8,854,907 $ 5,343,000 $ 1,754,988 $ 3,602,289 $ 742,345 $ 10,581,007 $ 34,467,000 $ 5,754,186 $ 9,870,335 $ - $ 33,362 $ 149,752,740
- - - 2,867,344 - 500 - - 390,040 - 197,221,988 204,371,774
- - - - - - - 1,000,000 - - - 1,000,000
- - - 28,207,330 - - - - - - - 50,590,202
336,629 - 39,350,917 248,238 - 578,938 - 139,725 361,439 - 32,390,590 73,613,706
- 25,000 - - 24,653 - 791,000 - - - 1,163,972 3,219,919
- - - - - - - - - - 906,195 906,195
45,511 - - - - 249,521 - - - 10,000 - 1,090,547
- - 1,419,783 - - 18,868 - 52,480 12,085 - - 4,257,161
- - 25,394,997 - - 1,974,735 - - - - - 27,369,732
- 1,812,000 - - 1,874,109 - 12,591,000 - - - - 22,685,253
- - 15,750 - - 2,935 - - - - - 18,685
- - - - - - - - - - - 4,848,918
- - - - - - - - - 225,000 - 225,000
- - - - - - - - - 1,000,000 - 1,000,000
- - - - - - - - - 162,000 - 162,000
9,237,047 7,180,000 67,936,435 34,925,201 2,641,107 13,406,504 47,849,000 6,946,391 10,633,899 1,397,000 231,716,107 545,111,832
- 42,781,000 - - 22,056,027 - 182,774,000 - - 816,000 - 352,338,833
- - 476,558 - - - - - 1,430,060 - - 5,818,618
- - 24,122,965 - - - - 620,678 - - - 24,743,643
70,846 - 85,721,571 393,539 - 1,585,764 - 24,743,405 8,367 - - 112,556,920
70,846 42,781,000 110,321,094 393,539 22,056,027 1,585,764 182,774,000 25,364,083 1,438,427 816,000 - 495,458,014
9,307,893 49,961,000 178,257,529 35,318,740 24,697,134 14,992,268 230,623,000 32,310,474 12,072,326 2,213,000 231,716,107 1,040,569,846
- - 6,724,416 - - 873,233 - 847,530 438,127 - - 9,169,115
- - 266,283 - - 25,996 - 19,496 13,339 - - 334,990
- - 6,990,699 - - 899,229 - 867,026 451,466 - - 9,504,105
- - 16,930,064 102,427 7,262 267,142 - 45,022 1,026,694 - 5,559,224 24,004,202
- - 537,584 84,825 - 145,625 - - 80,416 - - 914,980
- - - - - - - - - - - 78,708
- - - - - - - - - 3,000 - 12,358
- - - - - - - - - - 1,800,540 6,295,197
14,934 57,000 52,443,576 9,779 24,488,884 16,504 247,000 - 8,618,497 21,000 46,580 86,817,361
- - - 6,052,981 - - - - - - - 6,052,981
- - - - - - - - - - - 822,043
- - 100,465 5,209 - - - 70,000 - - - 176,807
- - - - - - - 120,000 - - - 120,000
- - - - - 9,375 - - 266,184 - - 275,559
- - - - - - - - - - - 112,936
14,934 57,000 70,011,689 6,255,221 24,496,146 438,646 247,000 235,022 9,991,791 24,000 7,406,344 125,683,132
- - 1,091,292 53,053 - - - 34,532 60,969 - - 1,261,378
- - - - - - - 1,576,794 - 1,000,000 - 2,576,794
- - 14,040,992 - - 2,142,082 - 1,670,191 1,048,537 - - 19,536,662
- - 615,199 - - 93,854 - 77,560 45,941 - - 841,032
- - - - - - - - - - - 18,273,765
- - 15,747,483 53,053 - 2,235,936 - 3,359,077 1,155,447 1,000,000 - 42,489,631
14,934 57,000 85,759,172 6,308,274 24,496,146 2,674,582 247,000 3,594,099 11,147,238 1,024,000 7,406,344 168,172,763
- - 15,750 - - - - - - - - 15,750
- - 1,242,649 - - 260,984 - 88,566 66,609 - - 1,696,188
- - 25,946 - - 6,160 - 4,879 1,938 - - 40,322
- - 1,284,345 - - 267,144 - 93,445 68,547 - - 1,752,260
- - 109,844,536 393,539 - 1,585,764 - 23,667,289 8,367 - - 135,499,495
- - - - - - - - - 379,000 - 379,000
- - - - - - - - - - 224,309,763 224,309,763
- - - - - - - - 1,430,060 - - 1,430,060
9,292,959 49,904,000 (11,639,825) 28,616,927 200,988 11,364,007 230,376,000 5,822,667 (130,420) 810,000 - 518,530,610
$ 9,292,959 $ 49,904,000 $ 98,204,711 $ 29,010,466 $ 200,988 $ 12,949,771 $ 230,376,000 $ 29,489,956 $ 1,308,007 $ 1,189,000 $ 224,309,763 $ 880,148,928
187
STATE OF NORTH DAKOTA
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position
Nonmajor Enterprise Funds
For the Fiscal Year Ended June 30, 2019
Addiction Beginning Community
Counselor Farmer Water Fire Infrastructure
Internship Revolving Facility and Guaranteed HIT Planning Revolving
Loan Loan Bonding Loan Edutech Tornado Student Loan Loan Fund Loan Fund
OPERATING REVENUES
Sales and Services $ - $ - $ 1,270 $ - $ 238,250 $ 2,439,402 $ 7,111,290 $ - $ -
Royalties and Rents - - - - - - - - -
Interest and Investment Income 6,128 - - 653,000 - - - 59,397 1,452,000
Miscellaneous - - 10,119 - - - - - -
Total Operating Revenues 6,128 - 11,389 653,000 238,250 2,439,402 7,111,290 59,397 1,452,000
OPERATING EXPENSES
Cost of Sales and Services - - - - - - - - -
Salaries and Benefits - - 23,960 - - 355,420 - - -
Operating 5,700 2,283,000 3,799 115,000 89,953 457,616 7,579,087 27,276 612,000
Claims - - 38,535 - - 2,039,364 - - -
Interest - - - - - - - - -
Depreciation - - - - 50,923 - - - -
Miscellaneous - 6,000 3,180 - - 29,523 - - -
Total Operating Expenses 5,700 2,289,000 69,474 115,000 140,876 2,881,923 7,579,087 27,276 612,000
Operating Income (Loss) 428 (2,289,000) (58,085) 538,000 97,374 (442,521) (467,797) 32,121 840,000
NONOPERATING REVENUES (EXPENSES)
Grants and Contracts - - - - - - - - -
Interest and Investment Income 117 5,000 202,386 14,000 - 1,405,852 50,948 - 19,000
Interest Expense - - (3,563) - - (38,158) - - -
Other - - - - - - - - -
Total Nonoperating Revenues (Expenses) 117 5,000 198,823 14,000 - 1,367,694 50,948 - 19,000
Income (Loss) Before Contributions and Transfers 545 (2,284,000) 140,738 552,000 97,374 925,173 (416,849) 32,121 859,000
Transfers In - 2,750,000 - - - - - - 24,000,000
Transfer Out - - - - - - - - -
Change in Net Position 545 466,000 140,738 552,000 97,374 925,173 (416,849) 32,121 24,859,000
Total Net Position - Beginning of Year 190,906 11,443,000 3,573,554 34,759,000 1,039,520 21,082,378 19,957,007 9,273,840 65,938,000
Total Net Position - End of Year $ 191,451 $ 11,909,000 $ 3,714,292 $ 35,311,000 $ 1,136,894 $ 22,007,551 $ 19,540,158 $ 9,305,961 $ 90,797,000
188
Medical PERS School
Interoperable Facility Uniform Rebuilders Construction State
Radio Infrastructure Mill and Group Loan Roughrider Assistance State Lottery Student Unemployment
Network Fund Loan Fund Elevator Insurance Program Industries Loan Fund Fair Fund Loan Compensation Total
$ 5,183,547 $ - $ 245,597,327 $ 332,091,694 $ - $ 7,281,329 $ - $ 6,944,615 $ 35,511,058 $ - $ 114,657,558 $ 757,057,340
- - - - - 174,763 - - - - - 174,763
- 458,000 - - 277,825 - 3,015,000 - - 70,000 - 5,991,350
- - - 6,094 - 82,310 - - - - - 98,523
5,183,547 458,000 245,597,327 332,097,788 277,825 7,538,402 3,015,000 6,944,615 35,511,058 70,000 114,657,558 763,321,976
- - 200,567,398 - - 3,763,747 - - - - - 204,331,145
26,629 - 19,088,505 976,168 - 2,164,281 - 1,947,148 1,087,379 - - 25,669,490
297,413 240,000 7,987,181 338,706,818 91,595 773,084 1,436,000 5,097,401 25,085,244 38,000 - 390,926,167
- - - - - - - - - - 84,205,911 86,283,810
- - - - - - - - - 31,000 - 31,000
23,156 - 5,644,673 294,577 - 192,870 - 1,654,700 2,063 - - 7,862,962
- - - 2,163 - - - - - - - 40,866
347,198 240,000 233,287,757 339,979,726 91,595 6,893,982 1,436,000 8,699,249 26,174,686 69,000 84,205,911 715,145,440
4,836,349 218,000 12,309,570 (7,881,938) 186,230 644,420 1,579,000 (1,754,634) 9,336,372 1,000 30,451,647 48,176,536
- - - - - - - 801,525 - - - 801,525
12,364 8,000 9,246 1,519,418 421 - 69,000 12,954 12,952 14,000 4,442,751 7,798,409
- - (1,753,116) - (201,011) - - (57,200) - - - (2,053,048)
- - 56,511 (325,000) - - - (4,240) - - - (272,729)
12,364 8,000 (1,687,359) 1,194,418 (200,590) - 69,000 753,039 12,952 14,000 4,442,751 6,274,157
4,848,713 226,000 10,622,211 (6,687,520) (14,360) 644,420 1,648,000 (1,001,595) 9,349,324 15,000 34,894,398 54,450,693
- - - - - - - 257,832 - 296,000 - 27,303,832
- - (8,140,828) - - - - - (9,342,500) - - (17,483,328)
4,848,713 226,000 2,481,383 (6,687,520) (14,360) 644,420 1,648,000 (743,763) 6,824 311,000 34,894,398 64,271,197
4,444,246 49,678,000 95,723,328 35,697,986 215,348 12,305,351 228,728,000 30,233,719 1,301,183 878,000 189,415,365 815,877,731
$ 9,292,959 $ 49,904,000 $ 98,204,711 $ 29,010,466 $ 200,988 $ 12,949,771 $ 230,376,000 $ 29,489,956 $ 1,308,007 $ 1,189,000 $ 224,309,763 $ 880,148,928
189
STATE OF NORTH DAKOTA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Fiscal Year Ended June 30, 2019
Addiction Beginning Community
Counselor Farmer Water Fire Guaranteed Infrastructure
Internship Revolving Facility and Student HIT Planning Revolving
Loan Program Loan Bonding Loan Edutech Tornado Loan Loan Fund Loan Fund
Cash Flows from Operating Activities:
Receipts from Customers and Users $ - $ - $ 46,387 $ - $ 224,521 $ 2,423,043 $ 6,574,700 $ - $ -
Interest Income on Loans - - - - - - - 59,178 -
Receipts from Loan Principal Repayments - - - - - - 671,812 1,188,169 -
Receipts from Others - - - - - - - - -
Payments to Other Funds - - (6) - - (2,431) - - -
Payments for Loan Funds - - - - - - (9,628,279) (740,652) -
Payments to Suppliers - (2,908,000) (7,114) (116,000) (99,917) (463,309) (811,123) (25,617) -
Payments to Employees - - (21,611) - - (338,319) - - -
Claim Payments - - - - - (3,240,312) - - -
Payments to Others (5,700) (6,000) - - - - - - (336,000)
Other - - - - - - - - -
Net Cash Provided by (Used for) Operating Activities (5,700) (2,914,000) 17,656 (116,000) 124,604 (1,621,328) (3,192,890) 481,078 (336,000)
Cash Flows from Noncapital Financing Activities:
Proceeds from Sale of Notes and Other Borrowings - - - - - - - - -
Principal Payments - Notes and Other Borrowings - - - - - - - - -
Interest Payments - Bonds - - - - - - - - -
Interest Payments - Notes and Other Borrowings - - - - - - - - -
Transfers In - 2,750,000 - - - - - - 24,000,000
Transfers Out - - - - - - - - -
Principal Payments on Due To Other Funds - - - - - - - - -
Grants Received - - - - - - - - -
Net Cash Provided by (Used for) Noncapital Financing Activities - 2,750,000 - - - - - - 24,000,000
Cash Flows from Capital and Related Financing Activities:
Acquisition and Construction of Capital Assets - - - - - - - - -
Principal Payments - Bonds - - - - - - - - -
Interest Payments - Bonds - - - - - - - - -
Payment of Bond Issue Costs - - - - - - -
Net Cash Provided by (Used for) Capital and Related Financing Activities - - - - - - - - -
Cash Flows from Investing Activities:
Proceeds from Sale and Maturities of Investment Securities - - - - - - - - -
Purchase of Investment Securities - - (185,793) - - (19,143) - - -
Net Increase In Investments - - - - - - - - -
Interest and Dividends on Investments 117 5,000 275,138 14,000 - 1,643,959 50,948 - 19,000
Disbursements for Loans and Loan Purchases (7,500) - - - - - - - (33,761,000)
Receipt of Loan Principal Repayments - - - 820,000 - - - - -
Proceeds from Collection of Loans and Notes Receivable 20,923 - - - - - - - 3,206,000
Loan Income Received 4,877 - - 659,000 - - - - 1,242,000
Net Cash Provided by (Used for) Investing Activities 18,417 5,000 89,345 1,493,000 - 1,624,816 50,948 - (29,294,000)
Net Change in Cash:
Net Increase (Decrease) in Cash and Cash Equivalents 12,717 (159,000) 107,001 1,377,000 124,604 3,488 (3,141,942) 481,078 (5,630,000)
Cash and Cash Equivalents at June 30, 2018 67,193 5,707,000 1,650,481 12,628,000 914,240 2,510,753 45,398,283 4,236,245 11,203,000
Cash and Cash Equivalents at June 30, 2019 $ 79,910 $ 5,548,000 $ 1,757,482 $ 14,005,000 $ 1,038,844 $ 2,514,241 $ 42,256,341 $ 4,717,323 $ 5,573,000
Reconciliation:
Current:
Cash Deposits at the Bank of North Dakota 79,910 5,548,000 136,008 14,005,000 1,038,844 243,813 42,124,746 - 5,573,000
Cash and Cash Equivalents - - 1,621,474 - - 2,270,428 - - -
Restricted Cash Deposits at the Bank of North Dakota - - - - - - 131,595 4,717,323 -
Cash and Cash Equivalents $ 79,910 $ 5,548,000 $ 1,757,482 $ 14,005,000 $ 1,038,844 $ 2,514,241 $ 42,256,341 $ 4,717,323 $ 5,573,000
190
(Continued on Next Page)
School
Medical PERS Construction
Facility Mill Uniform Rebuilders Assistance State
Interoperable Infrastructure and Group Loan Roughrider Revolving State Lottery Student Unemployment
Radio Loan Fund Elevator Insurance Program Industries Loan Fair Fund Loan Compensation Total
$ 5,558,798 $ - $ 322,293,634 $ 332,725,716 $ - $ 7,551,805 $ - $ 6,866,357 $ 26,618,695 $ 216,000 $ 126,306,757 $ 837,406,413
- - - - - - - - - - - 59,178
- - - - - - - - - - - 1,859,981
- - - - - - - - - - 505,500 505,500
- - - - (136,868) (266,358) - - - - - (405,663)
- - - - - - - - - - - (10,368,931)
(481,506) - (278,113,542) (338,720,640) - (4,622,453) (864,000) (5,020,463) (15,898,454) (39,000) (9,053,350) (657,244,488)
(29,157) - (18,196,123) (992,190) - (1,924,714) - (1,768,229) (940,047) - (4,434,082) (28,644,472)
- - - - - - - - - - (73,748,817) (76,989,129)
- - - - (150,650) - - - (212,485) - (34,697) (745,532)
- (234,000) - 5,702,931 - - - - - - - 5,468,931
5,048,135 (234,000) 25,983,969 (1,284,183) (287,518) 738,280 (864,000) 77,665 9,567,709 177,000 39,541,311 70,901,788
- - 43,000,000 - - - - - - - - 43,000,000
- - (32,655,860) - - - - - - - - (32,655,860)
- - - - - - - - - (30,000) - (30,000)
- - (1,742,224) - - - - - - - - (1,742,224)
- - - - - - - 257,832 - - - 27,007,832
- - (10,859,953) (325,000) - - - - (8,042,500) (8,577,000) - (27,804,453)
- - - (2,908,021) - - - - - - (2,908,021)
- - - - - - - 801,525 - - - 801,525
- - (2,258,037) (325,000) (2,908,021) - - 1,059,357 (8,042,500) (8,607,000) - 5,668,799
(51,557) - (22,619,060) - - (502,371) - (303,065) - - - (23,476,053)
- - - - - - - (120,000) - - - (120,000)
- - - - - - - (57,200) - - - (57,200)
- - - - - - - (16,500) - - (16,500)
(51,557) - (22,619,060) - - (502,371) - (496,765) - - - (23,669,753)
- - - 18,876,588 - - - - - 13,670,000 - 32,546,588
- - - (17,200,000) - - - - - (6,000,000) - (23,404,936)
- 1,519,418 - - - - - - 1,519,418
12,364 8,000 9,246 - 421 - 69,000 12,954 8,780 18,000 4,101,464 6,248,391
- (1,922,000) - - - - (56,026,000) - - - - (91,716,500)
- - - - - - 10,912,000 - - - - 11,732,000
- 1,615,000 - - 3,061,354 - - - - - - 7,903,277
- 458,000 - - 279,303 - 2,559,000 - - - - 5,202,180
12,364 159,000 9,246 3,196,006 3,341,078 - (42,486,000) 12,954 8,780 7,688,000 4,101,464 (49,969,582)
5,008,942 (75,000) 1,116,118 1,586,823 145,539 235,909 (43,350,000) 653,211 1,533,989 (742,000) 43,642,775 2,931,252
3,845,965 5,418,000 638,870 4,882,810 596,806 10,345,598 77,817,000 5,100,975 8,726,386 967,000 153,612,575 356,267,180
$ 8,854,907 $ 5,343,000 $ 1,754,988 $ 6,469,633 $ 742,345 $ 10,581,507 $ 34,467,000 $ 5,754,186 $ 10,260,375 $ 225,000 $ 197,255,350 $ 359,198,432
8,854,907 5,343,000 1,754,988 3,602,289 742,345 10,581,007 34,467,000 5,754,186 9,870,335 - 33,362 149,752,740
- - - 2,867,344 - 500 - - 390,040 - 197,221,988 204,371,774
- - - - - - - - 225,000 - 5,073,918
$ 8,854,907 $ 5,343,000 $ 1,754,988 $ 6,469,633 $ 742,345 $ 10,581,507 $ 34,467,000 $ 5,754,186 $ 10,260,375 $ 225,000 $ 197,255,350 $ 359,198,432
191
STATE OF NORTH DAKOTA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds (Continued)
For the Fiscal Year Ended June 30, 2019
Addiction Beginning Community
Counselor Farmer Water Fire Guaranteed Infrastructure
Internship Revolving Facility and Student HIT Planning Revolving
Loan Program Loan Bonding Loan Edutech Tornado Loan Loan Fund Loan Fund
Reconciliation of Operating Income (Loss) to Net Cash
Provided (Used for) Operating Activities:
Operating Income (Loss) $ 428 $ (2,289,000) $ (58,085) $ 538,000 $ 97,374 $ (442,521) $ (467,797) $ 32,121 $ 840,000
Adjustments to Reconcile Operating
Income to Net Cash Provided by Operating Activities:
Depreciation - - - - 50,923 - - - -
Reclassification of Interest Revenue\Expense - - - (653,000) - - - - -
Interest Received on Program Loans - - - - - - - - (1,452,000)
Receipt of Loan Principal Repayments - - - - - - - - -
Provision for Losses - - - - - - (2,206,467) - 244,000
Other - - - - - - - - -
Deferred Outflows - - 747 - - 37,766 - - -
Deferred Inflows - - 630 - - 13,670 - - -
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable - - 34,998 - (1,810) (16,359) (536,590) - -
(Increase) Decrease in Interest Receivable (6,128) - - - - - - (220) -
(Increase) Decrease in Due From - - - - (12,000) - - - 32,000
(Increase) Decrease in Intergovernmental Receivable - - - - - - - - -
(Increase) Decrease in Notes Receivable - - - - - - - 447,517 -
(Increase) Decrease in Prepaid Items - (625,000) - - - (75,638) - - -
(Increase) Decrease in Inventories - - - - - - - - -
(Increase) Decrease in Other Assets - - - - - - - - -
Increase (Decrease) in Accounts Payable - - 13 - (2,513) 31,080 - 1,660 -
Increase (Decrease) in Claims\Judgments Payable - - 38,535 - - (1,200,948) - - -
Increase (Decrease) in Intergovernmental Payable - - (6) - - - - - -
Increase (Decrease) in Accrued Payroll - - 2,732 - - 5,951 - - -
Increase (Decrease) in Compensated Absences Payable - - (2,309) - - (32,080) - - -
Increase (Decrease) in Amounts Held for Others - - - - - - - - -
Increase (Decrease) in Due To - - - (1,000) (7,370) (2,431) 54,269 - -
Increase (Decrease) in Unavailable Revenue - - - - - - - - -
Increase (Decrease) in Net Pension Liability - - 1,218 - - (6,905) - - -
Increase (Decrease) in Net OPEB Liability - - (817) - - (20,451) - - -
Increase (Decrease) in Other Liabilities - - - - - 87,538 (36,305) - -
Total Adjustments (6,128) (625,000) 75,741 (654,000) 27,230 (1,178,807) (2,725,093) 448,957 (1,176,000)
Net Cash Provided by (Used for) Operating Activities $ (5,700) $ (2,914,000) $ 17,656 $ (116,000) $ 124,604 $ (1,621,328) $ (3,192,890) $ 481,078 $ (336,000)
Noncash Transactions:
Net Change in Fair Value of Investments $ - $ - $ 77,443 $ - $ - $ 303,191 $ - $ - $ -
Value Received on Trade of Capital Asset - - - - - - - - -
Total Noncash Transactions $ - $ - $ 77,443 $ - $ - $ 303,191 $ - $ - $ -
192
School
Medical PERS Construction
Facility Mill Uniform Rebuilders Assistance State
Interoperable Infrastructure and Group Loan Roughrider Revolving State Lottery Student Unemployment
Radio Loan Fund Elevator Insurance Program Industries Loan Fair Fund Loan Compensation Total
$ 4,836,349 $ 218,000 $ 12,309,570 $ (7,881,938) $ 186,230 $ 644,420 $ 1,579,000 $ (1,754,634) $ 9,336,372 $ 1,000 $ 30,451,647 $ 48,176,536
23,156 - 5,644,673 294,577 - 192,870 - 1,654,700 2,063 - - 7,862,962
- (458,000) - - (277,825) - (3,015,000) - - 77,000 - (4,326,825)
- - - - - - - - - 3,000 - (1,449,000)
- - - - - - - - - 139,000 - 139,000
- 6,000 - - (199,745) - 519,000 - - - - (1,637,212)
- - 80,392 - - - - - - - - 80,392
- - (923,980) - - 114,207 - (457,581) 32,301 - - (1,196,540)
- - - - - 33,366 - 3,225 25,498 - - 76,389
132,004 - 9,870,451 5,651,886 - - - (78,258) (8,858) - 9,443,954 24,491,418
- - - - - - - - - - (6,348)
243,246 - - - - (157,972) - - - - 91,997 197,271
- - - - - - - - - - 543,230 543,230
- - - - - - - - - - - 447,517
- - (332,794) - - (2,163) - 1,782 (1,363) - - (1,035,176)
- - 523,865 - - (94,764) - - - - - 429,101
- - (28,614) - - (16,522) - - (209,516) - - (254,652)
(57) - (2,972,232) 3,734 3,822 (46,593) - (2,698) 263,719 - (414,286) (3,134,351)
- - - - - - - - - - - (1,162,413)
- - - 33 - - - - - - (587,841) (587,814)
(2,528) - (626,312) 784 - 35,050 - - 74 - - (584,249)
- - (29,053) (16,807) - - - 7,757 3,527 - - (68,965)
- - - 681,137 - - - - - - - 681,137
(184,035) - - (17,589) - 564 53,000 - 755 (44,000) 12,610 (135,227)
- - - - - (24,107) - - - - - (24,107)
- - 2,471,727 - - 59,788 - 625,812 84,439 - - 3,236,079
- - - - - (2,844) - 77,560 1,170 - - 54,618
- - (3,724) - - 2,980 - - 37,528 1,000 - 89,017
211,786 (452,000) 13,674,399 6,597,755 (473,748) 93,860 (2,443,000) 1,832,299 231,337 176,000 9,089,664 22,725,252
$ 5,048,135 $ (234,000) $ 25,983,969 $ (1,284,183) $ (287,518) $ 738,280 $ (864,000) $ 77,665 $ 9,567,709 $ 177,000 $ 39,541,311 $ 70,901,788
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 380,634
- - - - - - - 16,806 - - - 16,806
$ - $ - $ - $ - $ - $ - $ - $ 16,806 $ - $ - $ - $ 397,440
193
STATE OF NORTH DAKOTA
Internal Service Funds
Internal service funds are used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the State and to other government
units, on a cost reimbursement basis.
790 (927) - Central Services
Accounts for the revenues and expenditures associated with central printing and office supply
services to state agencies and the Legislative Assembly; a surplus property program for the
acquisition, distribution, and disposition of federal and state surplus property and procurement
services for all state agencies not exempt by statute.
700 (918) - Fleet Services
Accounts for costs of operating and maintaining State-owned vehicles. Costs are billed to user
agencies and include depreciation on equipment.
780 (929) - Information Technology Department
Accounts used for the procurement and maintenance of data processing equipment and supplies
and telecommunications equipment and supplies to provide data processing and
telecommunications services to state departments and agencies.
288\275 (912) - Risk Management Fund
Fund provides insurance coverage and loss prevention to all state agencies and the University
System for tort liability and employee injury claims. Coverage is provided using an optional
combination of self-insurance and private excess insurance.
194
STATE OF NORTH DAKOTA
Combining Statement of Net Position
Internal Service Funds
June 30, 2019
Information
Central Fleet Technology Risk
Services Services Department Management Total
ASSETS
Current Assets:
Cash Deposits at the Bank of ND $ 1,288,687 $ 16,605,745 $ 14,061,790 $ 816,008 $ 32,772,230
Cash and Cash Equivalents 400 - - 400,718 401,118
Investments at the Bank of ND - - - 341,583 341,583
Investments - - - 9,337,152 9,337,152
Accounts Receivable - Net 5,493 196,264 183,154 618 385,529
Interest Receivable - Net - - - 54,952 54,952
Intergovernmental Receivable - Net 70,330 30,074 273,442 - 373,846
Due from Other Funds 107,473 2,274,764 6,550,450 11,956 8,944,643
Prepaid Items 31,424 53,870 3,956,347 50,800 4,092,441
Inventory 122,653 - - - 122,653
Total Current Assets 1,626,460 19,160,717 25,025,183 11,013,787 56,826,147
Noncurrent Assets:
Capital Assets:
Nondepreciable - 154,838 - - 154,838
Depreciable, Net 242,144 89,408,306 4,430,536 - 94,080,986
Total Noncurrent Assets 242,144 89,563,144 4,430,536 - 94,235,824
Total Assets 1,868,604 108,723,861 29,455,719 11,013,787 151,061,971
DEFERRED OUTFLOWS OF RESOURCES
Derived from Pensions 489,583 1,190,799 13,257,849 255,434 15,193,665
Derived from OPEB 12,924 36,261 387,657 6,807 443,649
Total Deferred Outflow of Resources 502,507 1,227,060 13,645,506 262,241 15,637,314
LIABILITIES
Current Liabilities:
Accounts Payable 191,756 843,006 266,359 102,028 1,403,149
Accrued Payroll 81,395 185,958 2,267,836 38,311 2,573,500
Securities Lending Collateral - - - 36,879 36,879
Interest Payable - - - 2,576 2,576
Due to Other Funds 6,369 299,035 75,247 13,807 394,458
Claims/Judgments Payable - - - 1,213,316 1,213,316
Compensated Absences Payable 2,519 5,976 201,704 4,851 215,050
Capital Leases Payable 10,078 - - - 10,078
Total Current Liabilities 292,117 1,333,975 2,811,146 1,411,768 5,849,006
Noncurrent Liabilities:
Claims/Judgments Payable - - - 6,912,322 6,912,322
Compensated Absences Payable 55,471 60,869 2,054,495 49,413 2,220,248
Capital Leases Payable 8,209 - - - 8,209
Net Pension Liability 1,127,529 2,902,132 32,629,873 596,017 37,255,551
Net OPEB Liability 49,402 127,252 1,444,572 26,114 1,647,340
Total Noncurrent Liabilities 1,240,611 3,090,253 36,128,940 7,583,866 48,043,670
Total Liabilities 1,532,728 4,424,228 38,940,086 8,995,634 53,892,676
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions 107,286 289,171 2,576,043 63,581 3,036,081
Derived from OPEB 5,159 7,754 103,515 3,576 120,004
Total Deferred Inflow of Resources 112,445 296,925 2,679,558 67,157 3,156,085
NET POSITION
Net Investment in Capital Assets 223,857 89,563,143 4,430,537 - 94,217,537
Unrestricted 502,081 15,666,625 (2,948,956) 2,213,237 15,432,987
Total Net Position $ 725,938 $ 105,229,768 $ 1,481,581 $ 2,213,237 $ 109,650,524
195
STATE OF NORTH DAKOTA
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position
Internal Service Funds
For the Fiscal Year Ended June 30, 2019
Information
Central Fleet Technology Risk
Services Services Department Management Total
OPERATING REVENUES
Sales and Services $ 2,169,124 $ 29,619,795 $ 65,354,963 $ 3,973,131 $ 101,117,013
Miscellaneous - 288,989 - - 288,989
Total Operating Revenues 2,169,124 29,908,784 65,354,963 3,973,131 101,406,002
OPERATING EXPENSES
Cost of Sales and Services 829,488 - - - 829,488
Salaries and Benefits 1,144,460 2,971,567 32,675,073 528,995 37,320,095
Operating 415,134 15,400,527 32,122,915 660,792 48,599,368
Claims - - - 2,463,449 2,463,449
Depreciation 50,833 9,151,796 2,752,815 - 11,955,444
Miscellaneous - 49,379 - - 49,379
Total Operating Expenses 2,439,915 27,573,269 67,550,803 3,653,236 101,217,223
Operating Income (Loss) (270,791) 2,335,515 (2,195,840) 319,895 188,779
NONOPERATING REVENUES (EXPENSES)
Interest and Investment Income - - - 751,930 751,930
Interest Expense (2,901) - - (15,487) (18,388)
Gain (Loss) on Sale of Capital Assets (2,276) 922,416 (39,281) - 880,859
Total Nonoperating Revenues (Expenses) (5,177) 922,416 (39,281) 736,443 1,614,401
Income (Loss) Before Contributions and
Transfers (275,968) 3,257,931 (2,235,121) 1,056,338 1,803,180
Capital Grants and Contributions - 110,106 - - 110,106
Changes in Net Position (275,968) 3,368,037 (2,235,121) 1,056,338 1,913,286
Total Net Position - Beginning of Year, as restated 1,001,906 101,861,731 3,716,702 1,156,899 107,737,238
Total Net Position - End of Year $ 725,938 $ 105,229,768 $ 1,481,581 $ 2,213,237 $ 109,650,524
196
STATE OF NORTH DAKOTA
Combining Statement of Cash Flows
Internal Service Funds
For the Fiscal Year Ended June 30, 2019
Central Fleet Information Risk
Services Services Technology Management Total
Cash Flows from Operating Activities:
Receipts from Customers and Users $ 702,444 $ 45,154 $ 2,422,509 $ 1,716,493 $ 4,886,600
Receipts from Other Funds 1,482,929 29,950,352 62,706,545 2,251,802 96,391,628
Payments to Other Funds - (4,335) - (3,174,274) (3,178,609)
Payments to Suppliers (1,156,023) (15,487,938) (33,974,685) (730,751) (51,349,397)
Payments to Employees (1,013,997) (2,446,448) (28,077,036) (453,286) (31,990,767)
Claim Payments - - - (301,814) (301,814)
Net Cash Provided by (Used for) Operating Activities 15,353 12,056,785 3,077,333 (691,830) 14,457,641
Cash Flows from Noncapital Financing Activities:
Cash Flows from Capital and Related Financing Activities:
Acquisition and Construction of Capital Assets (132,855) (13,747,304) (3,008,053) - (16,888,212)
Proceeds from Sale of Capital Assets - 4,198,005 - - 4,198,005
Payment on Capital Leases (11,328) - - - (11,328)
Interest Payments - Capital Leases (2,901) - - - (2,901)
Net Cash Provided by (Used for) Capital and Related Financing Activities (147,084) (9,549,299) (3,008,053) - (12,704,436)
Cash Flows from Investing Activities:
Proceeds from Sale and Maturities of Investment Securities - - - 620,742 620,742
Interest and Dividends on Investments - - - 324,679 324,679
Net Cash Provided by (Used for) Investing Activities - - - 945,421 945,421
Net Change in Cash:
Net Increase (Decrease) in Cash and Cash Equivalents (131,731) 2,507,486 69,280 253,591 2,698,626
Cash and Cash Equivalents at June 30, 2018 1,420,818 14,098,259 13,992,510 963,135 30,474,722
Cash and Cash Equivalents at June 30, 2019 $ 1,289,087 $ 16,605,745 $ 14,061,790 $ 1,216,726 $ 33,173,348
Reconciliation:
Cash Deposits at the Bank of North Dakota 1,288,687 16,605,745 14,061,790 816,008 32,772,230
Cash and Cash Equivalents 400 - - 400,718 401,118
Cash and Cash Equivalents $ 1,289,087 $ 16,605,745 $ 14,061,790 $ 1,216,726 $ 33,173,348
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating Income (Loss) (270,791) 2,335,515 (2,195,840) 319,895 188,779
Adjustments to Reconcile Operating
Income to Net Cash Provided by Operating Activities:
Depreciation 50,833 9,151,796 2,752,815 - 11,955,444
Deferred Outflows 88,987 (12,825) 2,660,967 54,283 2,791,412
Deferred Inflows 59,791 89,308 1,088,321 41,726 1,279,146
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 46,051 (118,219) (52,361) (618) (125,147)
(Increase) Decrease in Due From (11,387) 235,015 (413,853) (4,952) (195,177)
(Increase) Decrease in Intergovernmental Receivable (23,962) (30,074) 240,306 - 186,270
(Increase) Decrease in Prepaid Items 7,943 (13,944) (443,573) (12,069) (461,643)
(Increase) Decrease in Inventories (43,028) - - - (43,028)
Increase (Decrease) in Accounts Payable 142,980 (24,090) - 63,521 182,411
Increase In Interest Payable - - (1,035,645) - (1,035,645)
Increase (Decrease) in Claims/Judgments Payable - - - (992,442) (992,442)
Increase (Decrease) in Accrued Payroll (2,497) (7,022) (65,064) 557 (74,026)
Increase (Decrease) in Compensated Absences Payable (9,652) 1,776 16,357 2,293 10,774
Increase (Decrease) in Due To (10,698) (4,335) (372,552) (140,873) (528,458)
Increase (Decrease) In Net OPEB Liability (4,638) 12,725 (39,298) (2,522) (33,733)
Increase (Decrease) In Net Pension Liability (4,579) 441,159 936,753 (20,629) 1,352,704
Total Adjustments 286,144 9,721,270 5,273,173 (1,011,725) 14,268,862
Net Cash Provided by (Used for) Operating Activities $ 15,353 $ 12,056,785 $ 3,077,333 $ (691,830) $ 14,457,641
Noncash Transactions:
Net Change in Fair Value of Investments $ - $ - $ - $ 204,741 $ 204,741
Decrease in Securities Lending Collateral - - - (61,956) (61,956)
Total Noncash Transactions $ - $ - $ - $ 142,785 $ 142,785
197
STATE OF NORTH DAKOTA
Fiduciary Funds
Fiduciary funds account for assets held by the State in a trustee capacity or as an agent for
individuals, private organizations, and/or other governmental organizations.
Pension and Other Employee-Related Benefit Trust Funds
DEFERRED COMPENSATION
981 - Deferred Compensation Fund
Accounts for the activity of the deferred compensation plan adopted under the provisions of
Internal Revenue Service Code, Section 457, for State employees.
PERS FLEXCOMP
932 - Flex Program
Accounts for pre-tax premium conversions, a medical spending account and a dependent care
spending account according to Section 125 of the Internal Revenue Code.
HIGHWAY PATROLMEN'S RETIREMENT
982 - Highway Patrolmen's Retirement Fund
A single employer defined benefit pension plan covering officers of the State Highway Patrol.
JOB SERVICE RETIREMENT
920 - Job Service Retirement Fund
A single employer defined benefit pension plan for Job Service employees. Participation in this
plan is limited to employees participating in the program as of September 30, 1980.
PREFUNDED RETIREE HEALTH PROGRAM
933 - Prefunded Retiree Health Program
Members receiving retirement benefits from NDPERS receive a credit toward their monthly eligible
insurance premium.
PUBLIC EMPLOYEES' RETIREMENT
470 (983) - Public Employees Retirement System
Accounts for the financial resources associated with the Public Employees Retirement System.
DEFINED CONTRIBUTION RETIREMENT
930 - Defined Contribution Retirement Plan
Accounts for the financial resources of the Defined Contribution Retirement Plan. Participation in
this plan is limited to state employees who are in positions not classified by the Central Personnel
Division and who are not employees of the judicial branch or board of higher education.
TEACHERS' RETIREMENT
964 - North Dakota Teachers' Fund For Retirement
Accounts for the financial resources of the Teachers' Retirement Fund.
Investment Trust Funds
911 - ND Association of Counties RIO Investments
Account for the investment assets held by the State Investment Board in a trustee capacity as an
agent for the North Dakota Association of Counties.
198
Fiduciary Funds
913 - City of Bismarck RIO Investments
Account for the investment assets held by the State Investment Board in a trustee capacity as an
agent for the City of Bismarck.
936 - City of Grand Forks RIO Investments
Account for the investment assets held by the State Investment Board in a trustee capacity as an
agent for the City of Grand Forks.
950 - City of Fargo RIO Investments
Account for the investment assets held by the State Investment Board in a trustee capacity as an
agent for the City of Fargo.
Private Purpose Trust Funds
STUDENT AND CULTURAL DONATIONS
928 - Indian Cultural Education Trust Fund
Trust accounts for donations provided for the purpose of generating income to benefit Indian
Culture.
937 - Department of Public Instruction Thordarson Scholarship Trust Fund
Fund used to provide scholarship grants to students enrolled in courses offered by the independent
study division.
988 - School for the Deaf Scholarship Trust Fund
Account for funds donated to provide scholarships to deaf students.
989 - School for the Deaf Student Trust Funds
Accounts for funds donated to the School for the Deaf for the benefit of the students.
COLLEGE SAVE
940 - College SAVE
Program established by the State of North Dakota to encourage the investment of funds to be used
for qualified higher education expenses at institutions of higher education.
MANDAN REMEDIATION TRUST
943 - Mandan Remediation Trust
Accounts for the funds obtained from a lawsuit settlement for the remediation efforts of the North
Dakota Health Department and the City of Mandan.
Agency Funds
BONDING
402 - Sales and Use Tax Deposit Fund
Accounts for cash received in lieu of a surety bond for sales tax permit holders.
403 - Motor Fuel Cash Bond Deposit Fund
Accounts for cash received in lieu of a surety bond for motor vehicle fuel dealers.
199
STATE OF NORTH DAKOTA
939 - Public Service Commission Trustee Account
Accounts for savings certificates posted in lieu of performance bonds for surface mining activities
and grain elevator insolvency cases.
942 - Agriculture Cash and Investment
Accounts for securities or bonds in lieu of a surety bond relating to the operation of livestock
dealers, auction markets and dairy plants.
944 - Cash Bonds
Accounts for the financial resources for the plugging of abandoned oil and gas wells and the
reclamation of abandoned oil and gas well sites.
945 - Insurance Company Deposits
Accounts for securities of domestic insurance companies required by the NDCC to keep on deposit
with the Insurance Commissioner securities in a value equal to the policies they have in force.
947 - District Court Bond Fund
Accounts for bail bonds posted for civil and criminal court cases.
PAYROLL
461 - OMB Unemployment/Payroll Clearing Fund
Accounts for employers and employees payroll taxes and other deductions such as, insurance and
credit union deductions, etc.
CHILD SUPPORT
463 - Child Support Disbursement Unit Fund
Accounts for all child support payments received by the state disbursement unit.
STUDENT AND OTHER
406 - Drivers License Trust Fund
Accounts for cash received from a motor vehicle operator involved in an accident and has no
automobile liability policy and the driver was negligent.
946 - District Court Collection Fund
Accounts for collections for third parties.
STUDENT AND OTHER cont.
986 - Developmental Center Residents' Funds
Accounts for funds belonging to patients of the State Developmental Center.
990 - Veteran's Home-Custodial
Accounts for resident's personal funds.
991 - State Hospital Patients
Accounts for patient's personal funds.
992 - Prisoner Accounts
Accounts for prisoner's personal fund.
993 - Youth Correctional Center Student Accounts
Account for the student's personal funds.
200
Fiduciary Funds
994 - School for the Deaf Students
Account for the students personal funds.
TAX COLLECTION
434 - City Lodging Tax Suspense
Accounts for city lodging tax collected by the State Tax Commissioner.
435 - City Sales Tax Suspense
Accounts for city sales and use taxes collected by the State Tax Commission.
437 - City Motor Vehicle Rental Tax
Accounts for city motor vehicle rental tax collected by the state tax commissioner.
438 - City Restaurant and Lodge Tax Suspense
A city tax, at a rate not to exceed one percent, upon the gross receipts of retailers on the leasing or
renting of hotel, motel, or tourist court accommodations within the city and gross receipts of a
restaurant from any sales of prepared food or beverages, not including alcoholic beverages for
consumption off the premises where purchased is collected by the State Tax Commissioner.
Proceeds, net of a 3% administrative fee which is deposited into the general fund, are remitted
quarterly to each city collecting the tax.
201
STATE OF NORTH DAKOTA
Combining Statement of Fiduciary Net Position
Pension, Investment and Private-Purpose Trust Funds
June 30, 2019
Pension and Other Employee Benefit Trust Funds
Defined Highway Job Prefunded
Deferred Contribution Patrolmen's Service PERS Retiree Health
Compensation Retirement Retirement Retirement Flexcomp Program
ASSETS
Cash Deposits at the Bank of ND $ 200,509 $ 114,690 $ - $ 2,113 $ 445,409 $ 936,159
Cash and Cash Equivalents - - - - - -
Receivables:
Contributions Receivable 1,037,149 105,171 - 2,430 505,782 1,050,419
Accounts Receivable - Net - - - - - -
Interest Receivable - Net - - 254,928 237 - 22
Due from Other Funds - - - - - 294
Total Receivables 1,037,149 105,171 254,928 2,667 505,782 1,050,735
Investments, at Fair Value:
Investments at the Bank of ND - - - - - -
Equities - - - - - -
Equity Pool - - 47,339,840 19,094,960 - 84,480,446
Fixed Income Pool 2,066,180 234,950 18,311,705 77,780,193 - 51,472,649
Cash and Cash Pool 2,327,401 193,159 480,015 409,888 - 9,404
Real Estate Pool - - 15,024,209 - - -
Mutual Funds 121,999,475 14,368,134 - - - -
Total Investments 126,393,056 14,796,243 81,155,769 97,285,041 - 135,962,499
Invested Securities Lending Collateral - - 264,646 - - -
Capital Assets (Net of Depreciation) 262,359 3,544 4,822 3,027 131,180 50,134
Total Assets 127,893,073 15,019,648 81,680,165 97,292,848 1,082,371 137,999,527
DEFERRED OUTFLOWS OF RESOURCES
Derived from Pensions - - - - - -
Total Deferred Outflows of Resources - - - - - -
LIABILITIES
Accounts Payable 16,071 8 - 89,602 24,592 478,706
Accrued Payroll 40,921 - - - 20,569 -
Securities Lending Collateral - - 264,646 - - -
Due to Other Funds 4,859 94 - - 2,801 -
Due to Fiduciary Funds - - - - - 86
Amounts Held in Custody for Others 14,795 - - - - -
Compensated Absences Payable 31,811 - - - 11,532 -
Total Liabilities 108,457 102 264,646 89,602 59,494 478,792
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions - - - - - -
Total Deferred Inflows of Resources - - - - - -
NET POSITION
Net Position Restricted for:
Pension Benefits 127,784,616 15,019,546 81,415,519 97,203,246 - 137,520,735
Other Employee Benefits - - - - 1,022,877 -
External Investment Pool Participants - - - - - -
Other Purposes - - - - - -
Total Net Position Restricted for Pension Benefits
and Other Purposes $ 127,784,616 $ 15,019,546 $ 81,415,519 $ 97,203,246 $ 1,022,877 $ 137,520,735
202
(Continued on Next Page)
Pension and Other Employee Benefit Trust Funds Investment Trust Funds
Public ND
Employees Teachers City of Association City of City of
Retirement Retirement Total Bismarck of Counties Grand Forks Fargo Total
$ 13,541,711 $ 20,305,041 $ 35,545,632 $ - $ - $ - $ - $ -
70,823 - 70,823 - - - - -
13,105,664 25,076,932 40,883,547 - - - - -
- - - - - - - -
9,617,806 12,526,857 22,399,850 449,660 4,028 182,168 73,292 709,148
- - 294 - - - - -
22,723,470 37,603,789 63,283,691 449,660 4,028 182,168 73,292 709,148
- - - - - - - -
- 1,495,354,621 1,495,354,621 71,526,231 2,221,513 45,891,784 22,440,882 142,080,410
1,786,074,688 - 1,936,989,934 - - - - -
690,878,383 575,551,625 1,416,295,685 46,561,116 3,918,313 17,653,044 17,458,242 85,590,715
18,110,399 35,025,659 56,555,925 438,861 189,199 668,378 447,844 1,744,282
566,845,153 455,163,805 1,037,033,167 28,183,950 - 11,200,354 4,420,372 43,804,676
- - 136,367,609 - - - - -
3,061,908,623 2,561,095,710 6,078,596,941 146,710,158 6,329,025 75,413,560 44,767,340 273,220,083
9,977,140 8,495,437 18,737,223 516,530 21,196 259,956 139,195 936,877
521,286 4,949 981,301 - - - - -
3,108,743,053 2,627,504,926 6,197,215,611 147,676,348 6,354,249 75,855,684 44,979,827 274,866,108
- 709,618 709,618 - - - - -
- 709,618 709,618 - - - - -
1,844,752 3,436,026 5,889,757 74,101 1,765 22,169 12,054 110,089
99,247 - 160,737 - - - - -
9,977,140 8,495,437 18,737,223 516,530 21,196 259,956 139,195 936,877
11,948 7,954 27,656 - - - - -
- - 86 - - - - -
- - 14,795 - - - - -
78,885 - 122,228 - - - - -
12,011,972 11,939,417 24,952,482 590,631 22,961 282,125 151,249 1,046,966
- 104,071 104,071 - - - - -
- 104,071 104,071 - - - - -
3,096,731,081 2,616,171,056 6,171,845,799 - - - - -
- - 1,022,877 - - - - -
- - - 147,085,717 6,331,288 75,573,559 44,828,578 273,819,142
- - - - - - - -
$ 3,096,731,081 $ 2,616,171,056 $ 6,172,868,676 $ 147,085,717 $ 6,331,288 $ 75,573,559 $ 44,828,578 $ 273,819,142
203
STATE OF NORTH DAKOTA
Combining Statement of Fiduciary Net Position
Pension, Investment and Private-Purpose Trust Funds (Continued)
June 30, 2019
Private-Purpose Trust Funds
Student and Mandan
Cultural Remediation College
Donations Trust SAVE Total
ASSETS
Cash Deposits at the Bank of ND $ 126,454 $ 5,782,369 $ - $ 5,908,823
Cash and Cash Equivalents 13,278 - 809,772 823,050
Receivables:
Contributions Receivable - - - -
Accounts Receivable - Net - - 185,538 185,538
Interest Receivable - Net 2,170 - - 2,170
Due from Other Funds 25 - - 25
Total Receivables 2,195 - 185,538 187,733
Investments, at Fair Value:
Investments at the Bank of ND 21,740 - - 21,740
Equities - - - -
Equity Pool - - - -
Fixed Income Pool 1,317,953 - - 1,317,953
Cash and Cash Pool - - - -
Real Estate Pool - - - -
Mutual Funds - - 456,003,055 456,003,055
Total Investments 1,339,693 - 456,003,055 457,342,748
Invested Securities Lending Collateral 39,457 - - 39,457
Capital Assets (Net of Depreciation) - - - -
Total Assets 1,521,077 5,782,369 456,998,365 464,301,811
DEFERRED OUTFLOWS OF RESOURCES
Derived from Pensions - - - -
Total Deferred Outflows of Resources - - - -
LIABILITIES
Accounts Payable 524 7,842 1,338,351 1,346,717
Accrued Payroll - - - -
Securities Lending Collateral 39,457 - - 39,457
Due to Other Funds - - - -
Due to Fiduciary Funds - - - -
Amounts Held in Custody for Others - - - -
Compensated Absences Payable - - - -
Total Liabilities 39,981 7,842 1,338,351 1,386,174
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions - - - -
Total Deferred Inflows of Resources - - - -
NET POSITION
Net Position Restricted for:
Pension Benefits - - - -
Other Employee Benefits - - - -
External Investment Pool Participants - - - -
Other Purposes 1,481,096 5,774,527 455,660,014 462,915,637
$ 1,481,096 $ 5,774,527 $ 455,660,014 $ 462,915,637
204
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205
STATE OF NORTH DAKOTA
Combining Statement of Changes in Fiduciary Net Position
Pension, Investment and Private-Purpose Trust Funds
For the Fiscal Year Ended June 30, 2019
Pension and Other Employee Benefit Trust Funds
Defined Highway Job Prefunded
Deferred Contribution Patrolmen's Service PERS Retiree Health
Compensation Retirement Retirement Retirement Flexcomp Program
ADDITIONS
Contributions:
Employer $ - $ 504,381 $ 2,090,886 $ - $ - $ 12,977,460
Employee 11,208,573 495,881 1,411,619 29,159 5,550,283 15,859
From Participants - - - - - -
Transfers from Other Funds 400,000 5,963 - - - -
Transfers from Other Plans 1,521,518 - - - - -
Donations - - - - - -
Total Contributions 13,130,091 1,006,225 3,502,505 29,159 5,550,283 12,993,319
Investment Income:
Net Change in Fair Value of Investments 6,252,160 4,619 2,678,760 3,497,989 - 5,197,140
Interest and Dividends 1,466 794,206 1,784,059 3,043,292 945 3,373,208
Less Investment Expense - 8,009 217,565 311,651 - 391,416
Net Investment Income 6,253,626 790,816 4,245,254 6,229,630 945 8,178,932
Securities Lending Activity:
Securities Lending Income - - 5,647 - - -
Less Securities Lending Expense - - - - - -
Net Securities Lending Income - - 5,647 - - -
Repurchase Service Credit - - 167,824 - - 377,329
Miscellaneous Income (Expense) 324,784 8,339 (41) - 772,629 (857)
Total Additions 19,708,501 1,805,380 7,921,189 6,258,789 6,323,857 21,548,723
DEDUCTIONS
Benefits Paid to Participants 5,975,993 1,049,355 5,341,256 4,626,846 5,460,799 1,031
Refunds - - 49,859 - - 7,180
Prefunded Credit Applied - - - - - 11,497,890
Transfer to Other Plans - - - - 75,000 -
Payments in Accordance with Trust Agreements - - - - - -
Administrative Expenses 916,616 8,535 43,555 16,808 570,248 437,349
Total Deductions 6,892,609 1,057,890 5,434,670 4,643,654 6,106,047 11,943,450
Purchase (Redemption) of Units at $1.00 Per Unit - - - - - -
Change in Net Position Held in Trust for:
Pension Benefits 12,815,892 747,490 2,486,519 1,615,135 - 9,605,273
Other Employee Benefits - - - - 217,810 -
External Investment Pool Participants - - - - - -
Other Purposes - - - - - -
Net Position - Beginning of Year 114,968,724 14,272,056 78,929,000 95,588,111 805,067 127,915,462
Net Position - End of Year $ 127,784,616 $ 15,019,546 $ 81,415,519 $ 97,203,246 $ 1,022,877 $ 137,520,735
206
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Pension and Other Employee Benefit Trust Funds Investment Trust Funds
Public ND
Employees Teachers City of Association City of City of
Retirement Retirement Total Bismarck of Counties Grand Forks Fargo Total
$ 81,588,318 $ 89,444,881 $ 186,605,926 $ - $ - $ - $ - $ -
78,213,580 82,429,594 179,354,548 - - - - -
- - - - - - - -
- - 405,963 - - - - -
- - 1,521,518 - - - - -
- - - - - - - -
159,801,898 171,874,475 367,887,955 - - - - -
100,603,577 84,701,380 202,935,625 5,162,288 286,310 2,672,275 1,219,139 9,340,012
67,026,499 56,434,954 132,458,629 3,332,349 145,905 1,630,647 1,034,503 6,143,404
8,017,853 6,272,801 15,219,295 374,121 10,924 181,246 88,641 654,932
159,612,223 134,863,533 320,174,959 8,120,516 421,291 4,121,676 2,165,001 14,828,484
211,869 224,713 442,229 11,959 578 6,832 5,468 24,837
- 44,927 44,927 2,392 117 1,366 1,089 4,964
211,869 179,786 397,302 9,567 461 5,466 4,379 19,873
7,219,697 1,916,787 9,681,637 - - - - -
(5,641) 158,713 1,257,926 - - - - -
326,840,046 308,993,294 699,399,779 8,130,083 421,752 4,127,142 2,169,380 14,848,357
185,644,486 215,328,174 423,427,940 - - - - -
11,782,488 5,900,392 17,739,919 - - - - -
- - 11,497,890 - - - - -
330,963 - 405,963 - - - - -
- - - - - - - -
2,531,304 2,251,083 6,775,498 - - - - -
200,289,241 223,479,649 459,847,210 - - - - -
- - - (1,000,000) - 1,049,520 (1,965,000) (1,915,480)
126,550,805 85,513,645 239,334,759 - - - - -
- - 217,810 - - - - -
- - - 7,130,083 421,752 5,176,662 204,380 12,932,877
- - - - - - - -
2,970,180,276 2,530,657,411 5,933,316,107 139,955,634 5,909,536 70,396,897 44,624,198 260,886,265
$ 3,096,731,081 $ 2,616,171,056 $ 6,172,868,676 $ 147,085,717 $ 6,331,288 $ 75,573,559 $ 44,828,578 $ 273,819,142
207
STATE OF NORTH DAKOTA
Combining Statement of Changes in Fiduciary Net Position
Pension, Investment and Private-Purpose Trust Funds (Continued)
For the Fiscal Year Ended June 30, 2019
Private-Purpose Trust Funds
Student and Mandan
Cultural Remediation College
Donations Trust SAVE Total
ADDITIONS
Contributions:
Employer $ - $ - $ - $ -
Employee - - - -
From Participants - - 47,864,276 47,864,276
Transfers from Other Funds - - - -
Transfers from Other Plans - - - -
Donations 4,554 - - 4,554
Total Contributions 4,554 - 47,864,276 47,868,830
Investment Income:
Net Change in Fair Value of Investments 16,210 - (30,043,631) (30,027,421)
Interest and Dividends 34,771 6,145 11,740,596 11,781,512
Less Investment Expense 3,160 - - 3,160
Net Investment Income 47,821 6,145 (18,303,035) (18,249,069)
Securities Lending Activity:
Securities Lending Income 1,141 - - 1,141
Less Securities Lending Expense - - - -
Net Securities Lending Income 1,141 - - 1,141
Repurchase Service Credit - - - -
Miscellaneous Income (Expense) 2,957 - - 2,957
Total Additions 56,473 6,145 29,561,241 29,623,859
DEDUCTIONS
Benefits Paid to Participants - - - -
Refunds - - - -
Prefunded Credit Applied - - - -
Transfer to Other Plans - - - -
Payments in Accordance with Trust Agreements 40,334 166,972 39,828,488 40,035,794
Administrative Expenses 1,202 89,230 3,359,862 3,450,294
Total Deductions 41,536 256,202 43,188,350 43,486,088
Purchase (Redemption) of Units at $1.00 Per Unit - - - -
Change in Net Position Held in Trust for:
Pension Benefits - - - -
Other Employee Benefits - - - -
External Investment Pool Participants - - - -
Other Purposes 14,937 (250,057) (13,627,109) (13,862,229)
Net Position - Beginning of Year 1,466,159 6,024,584 469,287,123 476,777,866
Net Position - End of Year $ 1,481,096 $ 5,774,527 $ 455,660,014 $ 462,915,637
208
STATE OF NORTH DAKOTA
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2019
Child Student Tax
Bonding Payroll Support and Other Collection Total
ASSETS
Cash Deposits at the Bank of ND $ 6,208,485 $ 46,185 $ 3,062,965 $ 3,393,457 $ 17,920,255 $ 30,631,347
Cash and Cash Equivalents 5,181,350 - 190,243 425,231 - 5,796,824
Investments at the Bank of ND 29,837,602 - - 50,000 - 29,887,602
Investments 141,619 - - - - 141,619
Accounts Receivable - Net - 11,033,893 - - - 11,033,893
Taxes Receivable - Net - - - - 46,901,827 46,901,827
Interest Receivable - Net - - - 124 - 124
Total Assets $ 41,369,056 $ 11,080,078 $ 3,253,208 $ 3,868,812 $ 64,822,082 $ 124,393,236
LIABILITIES
Intergovernmental Payable - 11,009,397 - - 64,820,530 75,829,927
Tax Refunds Payable 2,500 - - - 1,551 4,051
Amounts Held in Custody for Others 41,366,556 70,681 3,253,208 3,868,812 1 48,559,258
Total Liabilities $ 41,369,056 $ 11,080,078 $ 3,253,208 $ 3,868,812 $ 64,822,082 $ 124,393,236
209
STATE OF NORTH DAKOTA
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2019
June 30 June 30
2018 Additions Deductions 2019
Bonding
ASSETS
Cash Deposits at the Bank of ND $ 6,475,159 $ 379,277 $ 645,951 $ 6,208,485
Cash and Cash Equivalents 6,037,077 6,388,601 7,244,328 5,181,350
Investments at the Bank of ND 29,791,148 967,347 920,893 29,837,602
Investments 141,619 - - 141,619
Total Assets $ 42,445,003 $ 7,735,225 $ 8,811,172 $ 41,369,056
LIABILITIES
Tax Refunds Payable 11,000 2,500 11,000 2,500
Amounts Held in Custody for Others 42,434,003 7,675,225 8,742,672 41,366,556
Total Liabilities $ 42,445,003 $ 7,677,725 $ 8,753,672 $ 41,369,056
Payroll
ASSETS
Cash Deposits at the Bank of ND 213,729 126,162,165 126,329,709 46,185
Accounts Receivable - Net 10,297,613 11,033,893 10,297,613 11,033,893
Total Assets $ 10,511,342 $ 137,196,058 $ 136,627,322 $ 11,080,078
LIABILITIES
Intergovernmental Payable 10,457,993 11,009,396 10,457,992 11,009,397
Amounts Held in Custody for Others 53,349 125,201,979 125,184,647 70,681
Total Liabilities $ 10,511,342 $ 136,211,375 $ 135,642,639 $ 11,080,078
Child Support
ASSETS
Cash Deposits at the Bank of ND 3,142,926 131,331,542 131,411,503 3,062,965
Cash and Cash Equivalents 203,129 - 12,886 190,243
Accounts Receivable - Net 1 - 1 -
Total Assets $ 3,346,056 $ 131,331,542 $ 131,424,390 $ 3,253,208
LIABILITIES
Amounts Held in Custody for Others 3,346,056 134,756,166 134,849,014 3,253,208
Total Liabilities $ 3,346,056 $ 134,756,166 $ 134,849,014 $ 3,253,208
210
June 30 June 30
2018 Additions Deductions 2019
Student and Other
ASSETS
Cash Deposits at the Bank of ND $ 5,962,686 $ 3,975,618 $ 6,544,847 $ 3,393,457
Cash and Cash Equivalents 633,711 3,399,887 3,608,367 425,231
Investments at the Bank of ND 50,000 - - 50,000
Interest Receivable - Net 62 124 62 124
Total Assets $ 6,646,459 $ 7,375,629 $ 10,153,276 $ 3,868,812
LIABILITIES
Amounts Held in Custody for Others 6,646,459 7,375,629 10,153,276 3,868,812
Total Liabilities $ 6,646,459 $ 7,375,629 $ 10,153,276 $ 3,868,812
Tax Collection
ASSETS
Cash Deposits at the Bank of ND 18,472,678 326,511,760 327,064,183 17,920,255
Taxes Receivable - Net 40,948,498 46,901,827 40,948,498 46,901,827
Total Assets $ 59,421,176 $ 373,413,587 $ 368,012,681 $ 64,822,082
LIABILITIES
Intergovernmental Payable 59,417,287 397,127,572 391,724,329 64,820,530
Tax Refunds Payable 3,888 1,551 3,888 1,551
Amounts Held in Custody of Others 1 - - 1
Total Liabilities $ 59,421,176 $ 397,129,123 $ 391,728,217 $ 64,822,082
Total -All Agency Funds
ASSETS
Cash Deposits at the Bank of ND 34,267,178 588,360,362 591,996,193 30,631,347
Cash and Cash Equivalents 6,873,917 9,788,488 10,865,581 5,796,824
Investments at the Bank of ND 29,841,148 967,347 920,893 29,887,602
Investments 141,619 - - 141,619
Accounts Receivable - Net 10,297,614 11,033,893 10,297,614 11,033,893
Taxes Receivable - Net 40,948,498 46,901,827 40,948,498 46,901,827
Interest Receivable - Net 62 124 62 124
Total Assets $ 122,370,036 $ 657,052,041 $ 655,028,841 $ 124,393,236
LIABILITIES
Intergovernmental Payable 69,875,280 408,136,968 402,182,321 75,829,927
Tax Refunds Payable 14,888 4,051 14,888 4,051
Amounts Held in Custody for Others 52,479,868 275,008,999 278,929,609 48,559,258
Total Liabilities $ 122,370,036 $ 683,150,018 $ 681,126,818 $ 124,393,236
211
State of North Dakota
Statistical Information
212
STATE OF NORTH DAKOTA Statistical Section
INDEX TO SCHEDULES
Financial Trends – These schedules contain trend information to help the reader understand how the State’s
financial performance and well-being have changed over time.
Schedule 1 – Net Position by Component ...................................................217
Schedule 2 – Changes in Net Position ........................................................219
Schedule 3 – Fund Balances, Governmental Funds ...................................221
Schedule 4 – Changes in Fund Balances, Governmental Funds ................223
Revenue Capacity – These schedules contain trend information to help the reader assess the State’s
capacity to raise revenues and the sources of those revenues.
Schedule 5 – Taxable Sales by Industry......................................................225
Schedule 6 – Sales Tax Revenue Payers by Industry.................................225
Debt Capacity – These schedules present information to help the reader assess the affordability of the
State’s current levels of outstanding debt and the State’s ability to issue additional debt in the future.
Schedule 7 – Ratios of Outstanding Debt by Type ......................................227
Schedule 8 – Pledged Revenue Coverage ..................................................229
Schedule 9 – Legal Debt Limit .....................................................................231
Demographic and Economic Information – These schedules contain trend information to help the reader
understand the environment in which the State’s financial activities occur.
Schedule 10 – Demographic and Economic Indicators ...............................232
Schedule 11 – Principal Employers .............................................................233
Schedule 12 – Employment by Industry ......................................................233
Schedule 13 – Education Enrollment ...........................................................234
Operating Information – These schedules contain information about the State’s operations and resources by
the functions it performs.
Schedule 14 – State Employees by Agency ................................................235
Schedule 15 – Operating Indicators by Function .........................................237
Schedule 16 – Capital Assets by Function ..................................................238
Public Entity Risk Pool Claims Information
Schedule 17 – Claims Development Information .........................................239
Miscellaneous Statistics – This information may provide the reader with more insight into the State’s
financial status.
Schedule 18 – Agricultural Production .........................................................243
213
STATE OF NORTH DAKOTA
Schedule 1 -- Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2010 2011 2012 2013
Governmental Activities
Net Investment in Capital Assets $ 1,450,350,320 $ 1,640,080,874 $ 1,943,226,802 $ 2,331,214,264
Restricted 1,984,324,201 2,470,400,337 3,094,031,766 3,786,154,729
Unrestricted 1,772,441,595 2,537,062,796 3,635,538,536 5,597,014,917
Total Governmental Activities Net Position $ 5,207,116,116 $ 6,647,544,007 $ 8,672,797,104 $ 11,714,383,910
Business-Type Activities
Net Investment in Capital Assets 644,108,459 706,459,639 752,357,235 792,067,993
Restricted 445,609,412 452,312,013 569,991,053 632,431,958
Unrestricted 749,258,206 916,758,798 957,796,166 1,019,582,872
Total Business-Type Activities Net Position $ 1,838,976,077 $ 2,075,530,450 $ 2,280,144,454 $ 2,444,082,823
Primary Government
Net Investment in Capital Assets 2,094,458,779 2,346,540,513 2,695,584,037 3,123,282,257
Restricted 2,429,933,613 2,922,712,350 3,664,022,819 4,418,586,687
Unrestricted 2,521,699,801 3,453,821,594 4,593,334,702 6,616,597,789
Total Primary Government Net Position $ 7,046,092,193 $ 8,723,074,457 $ 10,952,941,558 $ 14,158,466,733
214
Statistical Section
2014 2015 2016 2017 2018 2019
$ 2,502,234,624 $ 3,622,722,021 $ 4,299,696,899 $ 4,759,286,304 $ 4,988,838,700 $ 5,185,682,467
4,976,564,822 6,254,673,532 6,246,873,312 6,224,908,099 6,355,103,413 6,639,785,616
7,109,867,360 6,812,545,677 5,781,826,861 5,989,501,438 7,172,275,944 8,786,695,069
$ 14,588,666,806 $ 16,689,941,230 $ 16,328,397,072 $ 16,973,695,841 $ 18,516,218,057 $ 20,612,163,152
844,395,270 1,023,384,933 1,155,758,401 1,223,438,996 1,214,133,386 1,246,740,894
600,269,799 485,012,106 533,664,273 888,080,253 924,610,477 972,887,591
1,287,315,405 1,439,859,232 1,528,847,402 1,633,421,219 1,779,197,611 1,904,500,531
$ 2,731,980,474 $ 2,948,256,271 $ 3,218,270,076 $ 3,744,940,468 $ 3,917,941,474 $ 4,124,129,016
3,346,629,894 4,646,106,954 5,455,455,300 5,982,725,300 6,202,972,086 6,432,423,361
5,576,834,621 6,739,685,638 6,780,537,585 7,112,988,352 7,279,713,890 7,612,673,207
8,397,182,765 8,252,404,909 7,310,674,263 7,622,922,657 8,951,473,555 10,691,195,600
$ 17,320,647,280 $ 19,638,197,501 $ 19,546,667,148 $ 20,718,636,309 $ 22,434,159,531 $ 24,736,292,168
215
STATE OF NORTH DAKOTA
Schedule 2 -- Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2010 2011 2012 2013
Expenses
Governmental Activities:
General Governmental $ 393,432,224 $ 507,512,750 $ 617,152,026 $ 889,332,121
Education 849,337,255 830,649,191 843,780,168 875,991,527
Health and Human Services 1,149,201,916 1,244,163,316 1,271,569,970 1,318,899,711
Regulatory 26,187,266 28,419,774 33,988,310 44,813,739
Public Safety and Corrections 284,846,465 242,521,440 303,602,543 209,732,547
Agriculture and Commerce 85,327,633 98,038,471 91,653,406 93,212,834
Natural Resources 81,304,271 117,862,905 132,679,303 114,752,488
Transportation 463,845,880 468,695,689 796,123,086 595,646,719
Interest on Long Term Debt 11,773,684 10,461,658 9,063,514 8,454,110
Total Governmental Activities Expenses 3,345,256,594 3,548,325,193 4,099,612,325 4,150,835,796
Business-Type Activities:
Bank of North Dakota 80,132,606 77,556,546 71,996,932 68,887,617
Housing Finance 62,931,910 69,824,036 56,046,981 48,368,304
Loan Programs 6,315,852 6,898,226 8,092,864 8,756,357
State Lottery 18,177,724 17,068,826 18,877,249 19,713,987
Unemployment Compensation 137,473,630 108,482,422 89,236,878 118,377,072
University System 963,820,452 1,008,539,618 1,047,949,521 1,080,816,602
Workers Compensation 218,185,899 300,297,491 359,216,200 448,535,174
Other 188,406,517 237,373,095 523,164,269 279,389,712
Total Business-Type Activities Expenses 1,675,444,590 1,826,040,260 2,174,580,894 2,072,844,825
Total Primary Government Expenses $ 5,020,701,184 $ 5,374,365,453 $ 6,274,193,219 $ 6,223,680,621
Program Revenues
Governmental Activities:
Charges for Services:
General Governmental 20,683,111 26,863,061 30,255,507 32,815,967
Education 5,440,633 6,985,958 7,515,580 6,086,567
Health and Human Services 31,858,461 36,563,927 36,100,539 38,381,590
Regulatory 23,963,949 22,122,244 30,312,566 32,359,807
Public Safety and Corrections 12,310,270 14,456,950 26,263,919 26,614,392
Agriculture and Commerce 29,530,575 29,861,552 31,026,427 35,652,945
Natural Resources 30,854,355 24,772,981 31,017,855 26,356,862
Transportation 90,768,728 96,023,474 111,125,056 120,821,133
Operating Grants and Contributions 2,025,395,367 2,015,949,905 2,012,322,201 1,867,800,810
Capital Grants and Contributions 63,034,991 12,768,330 18,099,423 5,353,007
Total Governmental Activities Program Revenues 2,333,840,440 2,286,368,382 2,334,039,074 2,192,243,080
Business-Type Activities:
Charges for Services:
Bank of North Dakota 138,081,000 140,043,000 145,038,000 161,080,000
Housing Finance 48,814,007 54,190,469 49,583,855 42,649,030
Loan Programs 6,013,058 5,989,229 6,185,948 7,538,124
State Lottery 24,498,988 23,085,242 26,587,851 27,999,486
Unemployment Compensation 115,951,800 119,074,810 126,040,929 127,174,321
University System 418,085,075 438,741,616 468,992,991 486,262,379
Workers Compensation 157,710,330 193,150,136 253,677,520 320,237,794
Other 201,085,424 246,210,771 278,124,295 289,981,947
Operating Grants and Contributions 412,398,322 449,392,800 601,695,091 370,855,633
Capital Grants and Contributions 19,762,204 14,258,261 20,975,446 19,865,857
Total Business-Type Activities Program Revenues 1,542,400,208 1,684,136,334 1,976,901,926 1,853,644,571
Total Primary Government Program Revenues $ 3,876,240,648 $ 3,970,504,716 $ 4,310,941,000 $ 4,045,887,651
Net (Expense)/Revenue
Governmental Activities (1,011,416,154) (1,261,956,811) (1,765,573,251) (1,958,592,716)
Business-Type Activities (133,044,382) (141,903,926) (197,678,968) (219,200,254)
Total Primary Government Net Expense $ (1,144,460,536) $ (1,403,860,737) $ (1,963,252,219) $ (2,177,792,970)
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes:
Individual and Corporate Income Taxes 379,938,009 605,526,736 658,905,496 863,018,492
Sales and Use Taxes 885,445,674 1,121,730,307 1,543,140,897 1,654,186,763
Oil, Gas and Coal Taxes 633,445,059 1,059,467,528 1,670,059,257 2,518,921,322
Business and Other Taxes 62,075,915 69,733,806 71,974,295 83,470,020
Unrestricted Investment Earnings 33,925,667 21,330,843 15,500,793 17,967,764
Tobacco Settlement 23,559,384 30,453,643 22,265,336 22,332,577
Miscellaneous 150,818,789 158,447,124 170,544,538 206,709,383
Contributions to Permanent Fund Principal 11,203,425 999,110 12,469,733 13,722,930
Special Items - - - -
Extraordinary Item - - - -
Transfers (350,496,669) (365,304,396) (368,204,484) (409,585,575)
Total Governmental Activities 1,829,915,253 2,702,384,702 3,796,655,862 4,970,743,676
Business-Type Activities:
Miscellaneous - - 1,940,000 39,166,106
Special Items - - - (14,728,630)
Transfers 324,785,928 376,538,823 390,214,559 358,701,147
Total Business-Type Activities 324,785,928 376,538,823 392,154,559 383,138,623
Total Primary Government $ 2,154,701,181 $ 3,078,923,525 $ 4,188,810,421 $ 5,353,882,299
Change in Net Position
Governmental Activities 818,499,099 1,440,427,891 2,031,082,611 3,012,150,960
Business-Type Activities 191,741,546 234,634,897 194,475,591 163,938,369
Total Primary Government $ 1,010,240,645 $ 1,675,062,788 $ 2,225,558,202 $ 3,176,089,329
216
Statistical Section
2014 2015 2016 2017 2018 2019
$ 1,283,916,089 $ 1,171,207,640 $ 1,055,377,601 $ 955,118,609 $ 1,034,864,058 $ 1,183,233,944
1,075,062,067 1,415,255,393 1,175,550,087 1,214,358,440 1,208,513,849 1,238,988,634
1,433,598,932 1,706,333,172 1,776,822,167 1,851,801,955 1,930,264,975 1,947,263,363
54,727,821 66,743,817 69,084,070 76,261,665 60,781,953 61,213,248
243,149,474 249,290,966 227,617,802 238,515,283 241,143,887 230,666,579
96,055,152 106,455,113 106,845,611 100,774,792 95,411,926 99,247,117
119,395,831 236,079,321 321,992,458 286,546,075 230,194,737 261,307,506
1,066,103,806 603,812,692 679,070,102 529,532,248 444,530,511 443,629,333
7,601,561 7,154,580 1,334,285 2,677,665 2,502,540 1,952,361
5,379,610,733 5,562,332,694 5,413,694,183 5,255,586,732 5,248,208,436 5,467,502,085
76,366,749 71,053,171 85,822,027 88,791,813 86,073,174 98,931,503
40,901,946 37,510,475 40,245,934 40,997,193 46,083,037 52,714,991
12,759,106 11,366,158 17,322,830 13,172,549 13,320,203 12,665,669
19,264,562 20,359,788 26,038,434 20,637,595 23,214,880 26,174,686
113,988,509 144,920,974 225,358,209 156,930,938 115,486,597 84,205,911
1,129,869,106 1,170,159,474 1,211,438,892 1,204,936,394 1,178,669,412 1,198,989,180
418,500,961 377,926,363 366,662,703 254,467,332 270,197,345 297,497,091
269,600,028 549,799,020 569,432,422 571,077,157 632,911,836 594,491,102
2,081,250,967 2,383,095,423 2,542,321,451 2,351,010,971 2,365,956,484 2,365,670,133
$ 7,460,861,700 $ 7,945,428,117 $ 7,956,015,634 $ 7,606,597,703 $ 7,614,164,920 $ 7,833,172,218
38,080,695 37,107,914 36,278,126 33,728,302 33,504,205 37,185,115
6,064,710 6,806,001 7,071,212 7,530,807 6,987,309 7,147,934
39,915,016 64,507,593 42,982,802 43,283,756 48,201,500 80,627,617
45,384,490 25,862,700 52,583,727 29,390,590 31,489,459 29,490,252
28,552,402 30,428,332 24,446,658 23,272,409 30,370,076 32,002,961
36,600,243 31,198,196 38,222,183 35,559,194 40,756,601 32,809,364
29,681,837 33,895,342 35,142,635 35,392,128 33,128,741 38,390,527
120,058,651 132,160,558 122,699,922 124,378,227 120,482,453 120,377,945
2,083,789,612 1,888,797,868 1,755,539,596 2,221,211,526 2,156,381,884 2,121,702,987
11,045,879 1,388,033 3,416,338 1,205,837 94,772 106,834
2,439,173,535 2,252,152,537 2,118,383,199 2,554,952,776 2,501,397,000 2,499,841,536
155,548,000 175,117,000 207,836,000 223,476,000 221,210,000 251,626,000
36,150,366 34,386,013 36,286,659 37,984,271 39,821,469 49,362,786
7,548,651 10,365,115 12,212,352 11,530,798 7,391,511 13,095,470
27,051,014 27,212,010 35,736,460 27,744,572 31,520,906 35,511,058
133,701,408 127,328,232 147,802,377 193,118,386 162,161,260 114,657,558
507,302,753 517,570,660 537,645,053 546,737,253 549,206,645 540,691,218
318,779,835 339,806,696 308,682,776 244,720,318 239,542,884 249,787,742
276,895,777 554,752,747 573,829,155 577,288,875 639,883,523 600,125,017
439,950,824 312,136,231 298,603,154 380,842,641 363,266,299 410,790,831
18,703,628 36,923,275 29,609,083 32,025,992 4,769,350 19,925,817
1,921,632,256 2,135,597,979 2,188,243,069 2,275,469,106 2,258,773,847 2,285,573,497
$ 4,360,805,791 $ 4,387,750,516 $ 4,306,626,268 $ 4,830,421,882 $ 4,760,170,847 $ 4,785,415,033
(2,940,437,198) (3,310,180,157) (3,295,310,984) (2,700,633,956) (2,746,811,436) (2,967,660,549)
(159,618,711) (247,497,444) (354,078,382) (75,541,865) (107,182,637) (80,096,636)
$ (3,100,055,909) $ (3,557,677,601) $ (3,649,389,366) $ (2,776,175,821) $ (2,853,994,073) $ (3,047,757,185)
700,867,920 732,975,064 414,964,865 418,040,178 452,792,812 604,088,632
1,756,777,615 1,804,380,378 1,348,342,960 1,236,701,340 1,326,248,557 1,435,129,762
3,335,934,782 2,734,507,198 1,457,361,212 1,490,398,754 2,196,877,038 2,586,569,876
82,437,250 92,936,834 99,295,506 98,374,118 100,127,079 110,714,853
130,011,232 117,643,232 64,347,477 489,070,430 380,164,919 360,264,138
23,652,803 21,789,723 22,776,760 21,599,800 55,305,183 20,752,400
198,533,139 161,725,312 119,545,563 119,134,899 163,996,339 231,745,021
14,251,211 16,382,336 15,637,987 11,895,026 4,393,122 11,014,244
- - (4,948,596) - - -
- - - (38,379,966) - -
(424,008,500) (542,713,254) (603,556,908) (503,278,766) (367,497,321) (290,718,287)
5,818,457,452 5,139,626,823 2,933,766,826 3,343,555,813 4,312,407,728 5,069,560,639
1,857,975 9,562,071 93,003 4,846,618 2,921,705 5,162,713
- - - - - -
455,888,029 535,979,992 611,332,622 598,094,515 285,002,133 277,018,465
457,746,004 545,542,063 611,425,625 602,941,133 287,923,838 282,181,178
$ 6,276,203,456 $ 5,685,168,886 $ 3,545,192,451 $ 3,946,496,946 $ 4,600,331,566 $ 5,351,741,817
2,878,020,254 1,829,446,666 (361,544,158) 642,921,857 1,565,596,292 2,101,900,090
298,127,293 298,044,619 257,347,243 527,399,268 180,741,201 202,084,542
$ 3,176,147,547 $ 2,127,491,285 $ (104,196,915) $ 1,170,321,125 $ 1,746,337,493 $ 2,303,984,632
217
STATE OF NORTH DAKOTA
Schedule 3 -- Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2010
General Fund
Reserved $ 4,990,240
Unreserved 834,021,114
Total General Fund 839,011,354
All Other Governmental Funds
Reserved 2,201,584,878
Unreserved, Reported in:
Special Revenue Funds 1,525,108,012
Total All Other Governmental
Funds 3,726,692,890
Total Fund Balances,
Governmental Funds $ 4,565,704,244
Note: Due to GASB Statement 54, a new table is included below for 2011 going forward.
2011 2012 2013 2014
General Fund
Nonspendable $ 4,628,040 $ 498,042,684 $ 1,355,179,441 $ 2,447,681,621
Restricted - - - -
Commited 682,696,887 996,737,740 840,061,206 1,365,420,166
Unassigned 712,046,495 1,412,091,095 2,142,277,489 1,421,552,566
Total General Fund 1,399,371,422 2,906,871,519 4,337,518,136 5,234,654,353
All Other Governmental Funds
Nonspendable 81,757,950 82,345,060 85,991,097 88,250,884
Restricted 2,371,817,130 3,003,088,539 3,679,248,354 4,913,528,772
Commited 1,055,012,373 682,600,401 1,200,571,048 1,628,346,627
Assigned 124,052,099 66,930,266 64,730,555 224,403,093
Unassigned (3,205,875) (3,797,855) (6,075,964) -
Total All Other Governmental
Funds 3,629,433,677 3,831,166,411 5,024,465,090 6,854,529,376
Total Fund Balances,
Governmental Funds $ 5,028,805,099 $ 6,738,037,930 $ 9,361,983,226 $ 12,089,183,729
218
Statistical Section
2015 2016 2017 2018 2019
$ 3,465,933,483 $ 3,908,797,255 $ 4,761,588,134 $ 5,551,216 $ 6,638,440
- - - 8,990,891 279,367
1,332,805,458 997,494,805 364,544,853 411,711,769 348,222,819
1,061,519,282 421,702,619 353,772,107 6,242,855,378 7,231,354,796
5,860,258,223 5,327,994,679 5,479,905,094 6,669,109,254 7,586,495,422
179,976,824 197,452,648 208,038,662 216,171,493 101,738,203
6,037,108,398 6,000,049,002 5,996,248,585 6,124,510,110 6,488,554,439
1,230,446,562 617,111,539 480,910,925 398,555,411 1,187,965,245
- 79,512,397 228,964,056 381,732,051 374,609,779
(8,477,525) (3,376,686) (3,146,889) - (1,642,214)
7,439,054,259 6,890,748,900 6,911,015,339 7,120,969,065 8,151,225,452
$ 13,299,312,482 $ 12,218,743,579 $ 12,390,920,433 $ 13,790,078,319 $ 15,737,720,874
219
STATE OF NORTH DAKOTA
Schedule 4 -- Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2010 2011 2012 2013
Revenues
Individual and Corporate Income Taxes $ 380,068,970 $ 602,185,856 $ 643,107,392 $ 845,590,604
Sales and Use Taxes 883,265,443 1,120,803,578 1,542,807,423 1,652,264,305
Oil, Gas, and Coal Taxes 633,497,612 1,058,519,977 1,670,529,100 2,518,629,175
Business and Other Taxes 62,344,622 70,417,133 72,084,077 80,514,313
Licenses, Permits and Fees 143,516,524 154,090,944 183,303,744 191,268,529
Intergovernmental 1,692,074,692 1,610,019,463 1,753,469,275 1,428,170,719
Sales and Services 47,993,528 53,599,656 51,864,186 51,333,672
Royalties and Rents 407,051,277 328,289,031 392,165,022 389,989,643
Fines and Forfeits 13,282,502 16,213,841 18,151,711 23,770,098
Interest and Investment Income 181,825,499 270,760,984 74,621,630 250,383,144
Tobacco Settlement 32,839,602 30,453,643 31,277,903 31,344,429
Commodity Assessments 19,558,592 23,111,279 19,710,327 28,572,996
Miscellaneous 11,870,275 7,622,389 25,651,998 56,131,404
Total Revenues 4,509,189,138 5,346,087,774 6,478,743,788 7,547,963,031
Expenditures
Current:
General Government 118,135,852 174,560,163 193,919,196 316,117,619
Education 849,104,680 830,379,618 842,666,213 874,348,965
Health and Human Services 1,147,503,138 1,240,584,657 1,267,415,392 1,316,596,317
Regulatory 22,114,812 25,371,933 30,249,484 35,368,070
Public Safety and Corrections 276,719,107 233,108,649 292,979,177 199,319,379
Agriculture and Commerce 85,141,016 97,880,158 91,516,274 92,435,869
Natural Resources 73,359,931 110,413,413 123,117,235 105,696,650
Transportation 425,930,371 430,542,156 753,087,144 550,383,353
Intergovernmental - Revenue Sharing 273,118,311 326,572,267 415,775,866 570,905,886
Capital Outlay 155,148,376 233,071,350 358,083,597 428,030,196
Debt Service:
Principal 30,513,501 16,869,266 18,282,996 17,421,039
Interest and Other Charges 12,318,072 10,659,235 9,736,260 8,744,962
Total Expenditures 3,469,107,167 3,730,012,865 4,396,828,834 4,515,368,305
Revenue over (under) Expenditures 1,040,081,971 1,616,074,909 2,081,914,954 3,032,594,726
Other Financing Sources (Uses)
Bonds and Notes Issued - 2,575,000 - -
Refunding Bonds Issued - 5,337,000 20,004,000 -
Payment to Refund Bond Escrow Agent - - - -
Payment of Refunded Bonds - (4,940,000) (25,041,000) -
Capital Lease Acquisitions 166,951 1,402,326 147,344 282,145
Sale of Capital Assets 471,890 539,837 284,974 641,170
Other - - - -
Transfers In 474,985,111 566,165,036 1,162,122,470 398,824,628
Transfers Out (825,481,779) (931,469,432) (1,530,199,911) (808,397,373)
Total Other Financing Sources (Uses) (349,857,827) (360,390,233) (372,682,123) (408,649,430)
Extraordinary Item - - - -
Net Changes in Fund Balances $ 690,224,144 $ 1,255,684,676 $ 1,709,232,831 $ 2,623,945,296
Debt Service as a Percentage of Noncapital Expenditures 1.2% 1.3% <1% <1%
220
Statistical Section
2014 2015 2016 2017 2018 2019
$ 736,426,799 $ 714,657,090 $ 424,229,756 $ 397,563,377 $ 459,742,512 $ 594,902,271
1,747,358,775 1,790,646,715 1,353,955,780 1,227,777,645 1,308,380,507 1,447,039,166
3,336,441,100 2,734,607,036 1,457,086,135 1,489,177,632 2,198,245,617 2,586,461,875
85,216,692 93,445,691 99,743,017 99,358,473 100,050,115 113,491,911
205,896,279 215,706,207 207,163,123 201,347,912 209,425,979 208,629,095
1,433,023,985 1,626,610,762 1,643,431,832 1,718,291,215 1,666,435,743 1,722,371,509
54,206,137 81,988,980 57,382,857 56,713,042 59,147,530 87,945,566
474,293,031 398,048,916 237,379,524 256,351,062 358,554,090 428,518,481
23,022,332 26,167,673 22,979,377 25,792,953 27,794,757 31,643,952
515,486,326 149,053,816 63,615,120 863,607,155 668,469,231 568,502,158
33,896,173 30,512,364 31,872,848 25,677,716 55,305,183 20,752,400
24,788,270 23,662,092 25,007,037 27,771,103 25,879,090 24,055,725
37,337,036 17,176,577 43,591,538 19,059,502 32,577,808 26,261,882
8,707,392,935 7,902,283,919 5,667,437,944 6,408,488,787 7,170,008,162 7,860,575,991
391,604,389 690,034,696 363,410,801 375,462,221 196,145,504 212,878,777
1,073,921,730 1,116,260,493 1,174,928,314 1,212,413,715 1,205,816,564 1,236,434,495
1,430,474,509 1,707,702,397 1,774,061,712 1,830,146,819 1,895,273,724 1,901,317,937
47,317,516 58,625,606 60,161,098 66,319,143 50,990,125 44,017,306
230,055,951 237,542,738 216,354,458 221,427,867 217,079,519 206,073,620
95,791,431 106,304,742 106,791,473 100,053,823 93,502,803 97,290,753
107,874,535 185,712,117 307,669,526 270,375,075 210,225,132 240,134,308
1,015,136,123 550,382,661 613,815,927 446,115,824 369,478,453 359,256,938
887,469,331 811,392,745 693,793,125 574,300,791 826,616,477 964,483,838
250,938,968 648,582,253 770,056,268 585,432,696 339,847,100 341,357,479
18,094,333 35,744,666 63,766,311 11,576,381 16,169,612 10,839,024
7,999,247 7,915,666 4,544,267 2,809,155 2,532,662 2,073,539
5,556,678,063 6,156,200,780 6,149,353,280 5,696,433,510 5,423,677,675 5,616,158,014
3,150,714,872 1,746,083,139 (481,915,336) 712,055,277 1,746,330,487 2,244,417,977
- - - - 42,812,909 -
- - - - - -
- - - - - -
- - - - (20,347,000) -
52,526 244,493 149,891 1,728,159 175,968 184,258
336,557 49,910 5,712,951 27,150 19,343 1,141,039
- - - - - -
104,808,196 1,176,200,047 838,882,833 346,374,625 291,318,581 285,737,190
(528,711,650) (1,718,913,302) (1,443,399,242) (849,628,391) (658,815,902) (576,455,477)
(423,514,371) (542,418,852) (598,653,567) (501,498,457) (344,836,101) (289,392,990)
- - - (38,379,966)
$ 2,727,200,501 $ 1,203,664,287 $ (1,080,568,903) $ 172,176,854 $ 1,401,494,386 $ 1,955,024,987
<1% <1% <1% 1.3% <1% <1%
221
STATE OF NORTH DAKOTA
Schedule 5
Taxable Sales by Industry
Last Ten Calendar Years
Calendar Year
2009 2010 2011 2012
Mining and Oil Extraction $ 704,397,852 $ 1,491,748,626 $ 3,609,963,576 $ 5,117,138,306
Construction 429,559,387 494,291,922 702,237,062 1,073,180,098
Manufacturing 649,627,740 711,340,542 995,535,882 1,270,236,581
Transportation, Communications,
And Public Utilities 489,144,528 390,215,115 577,280,642 652,478,635
Wholesale 2,413,689,772 3,367,800,790 4,394,667,162 5,987,059,129
Retail 4,334,670,425 4,686,288,902 5,448,304,958 6,348,806,735
Services 1,542,498,356 1,724,349,874 2,490,644,719 3,135,679,592
Accommodation and Food Service 1,179,623,344 1,271,280,053 1,471,737,060 1,706,097,731
Miscellaneous
Total $ 11,743,211,404 $ 14,137,315,824 $ 19,690,371,061 $ 25,290,676,807
Effective Tax Rate 4.97% 4.98% 4.86% 5.08%
Source: ND State Tax Department
Schedule 6
Sales Tax Revenue Payers by Industry
Calendar Years 2009 and 2018
(Dollars are in Millions)
Calendar Year 2009
Number Percentage Tax Percentage
of Filers of Total Liability of Total
Retail Trade 7,977 28.8% $ 202.18 34.0%
Wholesale Trade 4,409 15.9% 81.45 13.7%
Services 7,709 27.8% 65.02 11.0%
Transportation, Communications,
And Public Utilities 436 1.6% 28.40 4.8%
Manufacturing 2,450 8.8% 138.14 23.3%
Construction 1,772 6.4% 38.53 6.5%
Miscellaneous 2,693 9.7% 35.59 6.0%
Mining and Oil Extraction 266 1.0% 3.78 0.6%
Total 27,712 100.0% 593.09 100.0%
Source: ND State Tax Department
222
Statistical Section
Calendar Year
2013 2014 2015 2016 2017 2018
$ 4,374,052,860 $ 5,194,104,870 $ 3,195,799,670 $ 1,270,571,326 $ 1,933,586,774 $ 2,798,102,134
985,079,023 965,197,436 893,628,575 788,360,652 572,742,527 581,608,306
1,334,723,444 1,527,873,493 1,256,620,179 955,191,364 940,433,285 1,073,576,742
569,453,738 630,444,105 566,226,446 359,835,574 325,778,272 520,830,231
6,434,467,781 7,391,400,913 5,339,698,317 3,564,195,615 3,971,599,479 4,849,827,096
6,569,146,675 6,900,590,520 6,634,790,900 6,137,317,234 6,039,261,375 6,253,114,138
3,441,014,994 3,684,213,017 3,176,227,835 2,547,155,903 2,411,082,485 2,420,785,043
1,756,625,375 1,928,607,097 1,839,842,915 1,705,940,154 1,706,215,062 1,765,283,726
$ 25,464,563,890 $ 28,222,431,451 $ 22,902,834,837 $ 17,328,567,822 $ 17,900,699,259 $ 20,263,127,416
5.08% 5.00% 5.35% 5.42% 5.06% 5.12%
Calendar Year 2018
Number Percentage Tax Percentage
of Filers of Total Liability of Total
9,469 28.8% 316.45 30.5%
5,140 15.6% 242.44 23.3%
9,290 28.3% 121.29 11.7%
486 1.5% 26.04 2.5%
2,723 8.3% 53.68 5.2%
2,144 6.5% 29.08 2.8%
3,004 9.1% 109.45 10.5%
589 1.8% 139.91 13.5%
32,845 100.0% $ 1,038.34 100.0%
223
STATE OF NORTH DAKOTA
Schedule 7
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands)
Fiscal Year
2010 2011 2012 2013
Governmental Activities
Revenue bonds $ 232,102 $ 219,221 $ 197,021 $ 180,757
Capital leases 2,842 2,964 1,928 1,068
Notes Payable 19,493 8,563 7,428 6,211
Total Governmental Activities 254,437 230,748 206,377 188,036
Business-type Activities
Revenue bonds 1,301,368 1,193,816 1,069,257 919,506
Certificates of Participation - - - -
Capital leases 72,461 75,649 73,211 61,796
Notes payable 412,095 403,509 481,735 415,856
Total Business-Type Activities 1,785,924 1,672,974 1,624,203 1,397,158
Total Primary Government $ 2,040,361 $ 1,903,722 $ 1,830,580 $ 1,585,194
Debt as a Percentage of Personal Income 1 7.5% 7.1% 6.2% 4.8%
Amount of Debt per Capita 1 $ 3,103 $ 2,863 $ 2,714 $ 2,313
1
These ratios are calculated using personal income and population for the prior calendar year. See Schedule 10 for personal income and population data.
Details regarding the state's debt can be found in Note 3-L of the financial statements.
224
Statistical Section
Fiscal Year
2014 2015 2016 2017 2018 2019
$ 163,031 $ 129,345 $ 64,049 $ 54,105 $ 40,429 $ 29,950
667 600 467 1,695 1,415 1,118
4,981 4,412 3,891 2,181 22,248 21,897
168,679 134,357 68,407 57,981 64,092 52,965
901,527 884,086 1,040,019 1,019,125 1,242,368 1,525,285
- - - - - 96,843
44,774 41,224 38,533 41,425 40,058 54,359
484,763 665,792 747,186 1,299,860 1,289,686 1,120,787
1,431,064 1,591,102 1,825,738 2,360,410 2,572,112 2,797,274
$ 1,599,743 $ 1,725,459 $ 1,894,145 $ 2,418,391 $ 2,636,204 $ 2,850,239
4.1% 4.3% 4.4% 5.8% 6.4% 6.9%
$ 2,279 $ 2,383 $ 2,560 $ 3,195 $ 3,478 $ 3,760
225
STATE OF NORTH DAKOTA
Schedule 8
Pledged-Revenue Coverage
Last Ten Fiscal Years
Less: Net Debt Service Requirements
Fiscal Gross Operating Available
Year Revenues Expenses Revenues Principal Interest Coverage
BUILDING AUTHORITY BONDS
2010 11,026,000 - 11,026,000 10,360,000 4,005,000 0.77
2011 9,570,000 - 9,570,000 6,243,000 3,656,000 0.97
2012 11,298,000 - 11,298,000 7,106,000 3,211,000 1.10
2013 8,394,000 - 8,394,000 5,806,000 2,655,000 0.99
2014 9,176,000 - 9,176,000 6,825,000 2,336,000 1.00
2015 8,163,000 - 8,163,000 6,130,000 2,080,000 0.99
2016 9,868,000 - 9,868,000 6,375,000 1,896,000 1.19
2017 5,300,000 - 5,300,000 5,315,000 1,680,000 0.76
2018 32,500,000 - 32,500,000 31,110,000 1,485,000 1.00
2019 $ 6,343,000 $ - $ 6,343,000 $ 5,200,000 $ 1,092,000 1.01
Pledged revenues include interest and lease payments.
WATER COMMISSION BONDS
2010 9,658,200 - 9,658,200 5,055,000 4,685,748 0.99
2011 9,425,473 - 9,425,473 5,227,642 4,645,491 0.95
2012 9,761,020 - 9,761,020 5,541,961 4,372,017 0.98
2013 9,863,578 - 9,863,578 5,760,272 4,142,814 1.00
2014 16,615,188 - 16,615,188 5,990,528 3,911,439 1.68
2015 8,783,565 - 8,783,565 13,343,592 3,318,972 0.53
2016 45,840,868 - 45,840,868 52,525,000 1,309,125 0.85
Pledged revenues inlcude user fees, interest, and Tobacco Settlement funds.
INFORMATION TECHNOLOGY BONDS
2010 48,633,238 38,453,612 10,179,626 1,716,372 790,686 4.06
2011 49,841,497 41,956,029 7,885,468 10,537,178 324,831 0.73
2012 53,268,445 47,300,345 5,968,100 694,550 89,028 7.62
2013 58,427,069 52,478,918 5,948,151 736,600 39,805 7.66
2014 60,619,327 53,925,234 6,694,093 711,950 14,239 9.22
Pledged revenues include user fees.
DEPARTMENT OF TRANSPORTATION BONDS
2010 5,750,480 - 5,750,480 3,355,000 2,397,783 1.00
2011 5,271,363 - 5,271,363 3,465,000 1,854,138 0.99
2012 5,345,315 - 5,345,315 3,595,000 1,726,615 1.00
2013 5,344,822 - 5,344,822 3,725,000 1,597,010 1.00
2014 5,320,012 - 5,320,012 3,865,000 1,451,535 1.00
2015 5,318,070 - 5,318,070 4,015,000 1,303,070 1.00
2016 5,317,250 - 5,317,250 4,165,000 1,150,500 1.00
2017 5,315,500 - 5,315,500 4,375,000 942,250 1.00
2018 5,314,000 - 5,314,000 4,590,000 723,500 1.00
2019 $ 5,313,500 $ - $ 5,313,500 $ 4,820,000 $ 494,000 1.00
Pledged revenues include interest and federal (intergovernmental revenues and tranfers from fund 002),
highway fund appropriations, and transfers from Highway fund (200).
`
226
Statistical Section
Less: Net Debt Service Requirements
Fiscal Gross Operating Available
Year Revenues Expenses Revenues Principal Interest Coverage
STUDENT LOAN TRUST
2010 1,630,000 925,000 705,000 1,000,000 535,000 0.46
2011 1,406,000 923,000 483,000 9,000,000 288,000 0.05
2012 1,168,000 770,000 398,000 2,000,000 39,000 0.20
2013 976,000 658,000 318,000 2,200,000 24,000 0.14
2014 868,000 559,000 309,000 - 9,000 34.33
2015 732,000 487,000 245,000 - 9,000 27.22
2016 639,000 402,000 237,000 - 10,000 23.70
2017 543,000 361,000 182,000 - 14,000 13.00
2018 237,000 57,000 180,000 - 22,000 8.18
2019 $ 84,000 $ 38,000 $ 46,000 $ - $ 31,000 1.48
Pledged revenues include federal revenues, and loan and investment interest.
HOUSING FINANCE AGENCY
2010 72,564,000 26,958,000 45,606,000 354,181,000 37,499,000 0.12
2011 74,163,000 46,020,000 28,143,000 247,099,000 36,352,000 0.10
2012 62,386,855 42,874,000 19,512,855 246,535,000 36,562,000 0.07
2013 55,452,870 36,480,000 18,972,870 209,045,000 29,902,000 0.08
2014 48,261,366 28,677,687 19,583,679 189,830,000 22,360,000 0.09
2015 46,104,013 25,535,000 20,569,013 136,385,000 18,303,000 0.13
2016 48,479,659 27,986,000 20,493,659 102,480,000 17,801,000 0.17
2017 50,851,271 28,185,000 22,666,271 249,400,000 17,985,000 0.08
2018 54,771,000 29,905,000 24,866,000 126,620,000 18,900,000 0.17
2019 $ 64,712,000 $ 37,843,000 $ 26,869,000 $ 89,660,000 $ 23,474,000 0.24
Pledged revenues include income and proceeds from mortgage loan activity.
UNIVERSITY SYSTEM
2010 663,347,234 823,053,516 (159,706,282) 25,067,090 12,968,810 (4.20)
2011 777,992,712 937,253,706 (159,260,994) 19,435,268 14,390,104 (4.71)
2012 708,136,180 979,701,772 (271,565,592) 27,187,867 15,553,703 (6.35)
2013 729,800,506 1,012,017,963 (282,217,457) 43,206,702 12,842,418 (5.04)
2014 750,780,897 1,051,848,696 (301,067,799) 42,458,545 11,650,094 (5.56)
2015 758,127,326 1,090,845,378 (332,718,052) 45,904,456 13,702,718 (5.58)
2016 838,245,926 1,200,399,795 (362,153,869) 60,435,257 12,328,344 (4.98)
2017 794,108,239 1,186,452,340 (392,344,101) 46,330,594 12,539,581 (6.66)
2018 795,593,560 1,160,802,712 (365,209,152) 44,073,161 12,241,613 (6.49)
2019 $ 814,825,704 $ 1,179,695,430 $ (364,869,726) $ 20,538,565 $ 11,627,313 (11.34)
Pledged revenues include student fees, auxiliary revenues, sales, tax revenue,
investment income and debt service grants.
NOTE: Gross revenues include nonoperating interest income. Operating expenses do not include bond interest or
depreciation expenses.
227
STATE OF NORTH DAKOTA Statistical Section
Schedule 9
Legal Debt Limit
Fiscal Year Ending June 30, 2019
The state may issue or guarantee the payment of bonds, provided that all bonds in excess of two million dollars shall
be secured by first mortgage upon real estate in amounts not to exceed sixty-five percent of its value; or upon real
and personal property of state-owned utilities, enterprises, or industries, in amounts not exceeding its value, and
provided further, that the state shall not issue or guarantee bonds upon property of state-owned utilities, enterprises,
or industries in excess of ten million dollars.
No further indebtedness shall be incurred by the state unless evidenced by a bond issue, which shall be authorized
by law for certain purposes, to be clearly defined. Every law authorizing a bond issue shall provide for levying an
annual tax, or make other provision, sufficient to pay the interest semiannually, and the principal within thirty years
from the date of the issue of such bonds and shall specially appropriate the proceeds of such tax, or of such other
provisions to the payment of said principal and interest, and such appropriation shall not be repealed nor the tax or
other provisions discontinued until such debt, both principal and interest, shall have been paid. No debt in excess of
the limit named herein shall be incurred except for the purpose of repelling invasion, suppressing insurrection,
defending the state in time of war or to provide for the public defense in case of threatened hostilities.
The State is in compliance with the Legal Debt Margin.
Source: North Dakota Constitution, Art. X, Section 13.
The State of North Dakota has had no General Obligation Bonded Debt since Fiscal Year 1998. No Schedule of
Ratios of General Bonded Debt is being presented.
228
STATE OF NORTH DAKOTA Statistical Section
Schedule 10
Demographic and Economic Indicators
Last Ten Calendar Years
Total Annual
Personal Per Capita ND Average
Income (b) Personal Unemployment UI Covered
Year Population (a) (000's) Income (b) Rate (c) Employment (d)
2009 664,968 26,687,878 40,134 4.1% 349,561
2010 674,518 29,450,250 43,661 3.8% 358,674
2011 684,830 33,306,563 48,635 3.5% 379,433
2012 701,380 39,449,209 56,245 3.1% 411,710
2013 722,908 40,296,443 55,742 2.9% 427,109
2014 738,658 42,991,436 58,202 2.7% 444,658
2015 754,859 42,002,831 55,643 2.8% 437,078
2016 755,548 41,404,978 54,801 3.1% 417,150
2017 755,393 41,277,100 54,643 2.6% 414,039
2018 760,077 42,147,700 55,542 2.6% 417,578
Source:
(a) Census Bureau
(b) Bureau of Economic Analysis
(c) Local Area Unemployment Statistics program (SA)
(d) Quarterly Census of Employment and Wages program
229
STATE OF NORTH DAKOTA Statistical Section
Schedule 11
Principal Employers
North Dakota Century Code 52-01-02 and 52-01-03 prohibits Job Service North Dakota from disclosing information provided to them by
employers, including the employer name and number of employees, unless authorized by the employer. Sufficient permission has not
been received to allow for presentation of this schedule.
The following schedule is being presented as an alternative to the principal employer schedule:
Schedule 12
Employment by Industry
Current Calendar Year and Ten Years Ago
2018 2009
Percent of Percent of
Total Nonagricultural Total Nonagricultural
Industry Number of Wage and Salary Number of Wage and Salary
Employees Rank Employment Employees Rank Employment
Government 82,500 1 19.04% 77,900 1 21.25%
Educational and Health Services 63,700 2 14.70% 53,300 2 14.54%
Retail Trade 46,900 3 10.82% 42,600 3 11.62%
Leisure and Hospitality 40,200 4 9.28% 34,000 4 9.27%
Professional and Business Services 34,600 5 7.98% 29,300 5 7.99%
Construction 25,900 6 5.98% 20,900 7 5.70%
Manufacturing 25,900 7 5.98% 23,500 6 6.41%
Financial Activities 24,300 8 5.61% 20,200 8 5.51%
Wholesale Trade 23,900 9 5.51% 20,100 9 5.48%
Transportation, Warehousing and Utilities 23,400 10 5.40% 15,000 11 4.09%
Logging and Mining 20,700 11 4.78% 7,000 13 1.91%
Other Services 15,200 12 3.51% 15,300 10 4.17%
Information 6,200 13 1.43% 7,500 12 2.05%
Total 433,400 100% 366,600 100%
Source: Job Service North Dakota: Current Employment Statistics Program.
230
STATE OF NORTH DAKOTA Statistical Section
Schedule 13
Education Enrollment
Last Ten Academic Years
Public School Enrollment
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Kindergarten 7,446 8,236 8,575 8,822 9,033 8,925 8,841 9,271 9,324 9,620
Grades 1-3 21,592 22,229 23,796 24,859 25,960 26,585 26,320 26,316 26,663 27,208
Grades 4-6 20,788 20,932 22,008 22,810 23,751 24,513 25,244 26,076 26,580 26,622
Grades 7-8 14,662 14,740 14,750 14,920 15,299 15,642 16,115 16,511 16,845 17,561
Grades 9-12 30,241 29,641 30,063 30,245 30,235 30,405 30,343 30,771 31,430 31,847
Total Enrollment 94,729 95,778 99,192 101,656 104,278 106,070 106,863 108,945 110,842 112,858
Special Education Students 13,170 13,123 13,268 13,399 13,675 13,988 14,429 15,175 15902 NA
Source: Department of Public Instruction
University System Full-Time Equivalent Student Enrollment
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Bismarck State College 3,208 3,209 2,990 2,955 2,909 2,912 2,860 2,646 2,611 2,598
Dakota College at Bottineau 540 524 474 502 518 459 490 527 590 596
Dickinson State University 2,054 1,959 1,454 1,201 1,176 1,070 1,114 1,128 1,090 1,093
Lake Region State College 921 988 973 943 978 981 971 995 1,005 974
Mayville State University 704 704 759 749 798 796 782 784 817 801
Minot State University 3,002 2,795 2,731 2,710 2,600 2,570 2,591 2,467 2,483 2,399
ND State College Of Science 2,217 2,366 2,354 2,295 2,272 2,305 2,298 2,253 2,126 2,076
North Dakota State University 12,708 12,606 12,707 12,797 12,934 12,834 12,782 12,784 12,394 11,704
University of North Dakota 12,018 12,319 12,728 12,606 12,420 12,455 12,180 11,964 11,585 11,164
Valley City State University 957 1,011 995 975 990 1,031 1,044 1,086 1,096 1,164
Williston State College 570 608 537 593 579 738 756 763 806 783
Total 38,899 39,089 38,702 38,326 38,174 38,151 37,870 37,398 36,603 35,352
Source: North Dakota University System, Fall Enrollment Reports
231
STATE OF NORTH DAKOTA Statistical Section
Schedule 14
State Employees by State Agency
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EXECUTIVE BRANCH
Adjutant General 174 172 174 178 177 170 155 155 155 155
Aeronautics Commission 6 6 6 6 6 6 7 7 7 7
Bank of North Dakota 177 177 177 177 180 180 182 183 190 190
Barley Council 6 5 5 5 5 5 5 5 5 1
Beef Commission 2 2 2 2 2 2 2 3 3 3
Career and Technical Education 34 34 34 34 34 29 27 27 25 25
Corn Council 3 3 4 5 6 6 6 6 6 3
Council on the Arts 5 5 5 5 5 5 5 5 5 5
Department of Agriculture 72 75 75 76 77 77 77 77 73 74
Department of Commerce 68 68 68 68 70 69 69 69 54 66
Department of Corrections and Rehabilitation 704 705 739 812 813 834 838 845 845 895
Department of Emergency Services 60 65 64 68 70 76 79 79 79 76
Department of Environmental Quality 0 0 0 0 0 0 0 0 0 2
Department of Financial Institutions 29 29 29 29 29 29 30 31 30 30
Department of Human Services 2,222 2,232 2,201 2,201 2,203 2,215 2,216 2,218 2,163 2,140
Department of Public Instruction 99 101 99 99 99 100 100 92 92 94
Department of Transportation 1,057 1,066 1,066 1,081 1,084 1,082 1,081 1,081 1,047 1,008
Department of Trust Lands 21 23 26 28 31 34 34 33 30 30
Game and Fish Department 20 157 157 158 158 164 163 163 163 164
Highway Patrol 194 194 198 198 213 215 215 204 204 204
Historical Society 63 63 66 73 72 73 80 80 77 78
Indian Affairs Commission 4 4 4 5 5 5 5 5 5 4
Industrial Commission 60 68 73 93 93 114 113 114 106 108
Information Technology Department 339 341 335 326 341 354 350 352 346 447
Job Service North Dakota 309 309 309 252 239 238 182 182 182 182
Milk Marketing Board 6 6 6 6 6 6 6 6 6 4
ND Department of Health 346 341 345 352 354 365 366 368 360 365
ND Horse Racing Commission 2 2 2 2 2 2 2 2 2 2
ND Housing Finance Agency 46 46 46 46 46 40 41 41 41 42
ND Mill and Elevator Association 130 131 130 131 134 135 142 147 153 151
ND Vision Services/School for the Blind 32 33 33 33 33 33 32 32 30 30
North Dakota University System 7,579 7,775 7,756 7,763 7,904 8,028 8,012 7,532 7,290 7,207
Office of Administrative Hearings 7 7 7 7 5 5 5 5 5 5
Office of Management and Budget 133 135 134 134 134 132 124 123 117 118
232
STATE OF NORTH DAKOTA Statistical Section
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EXECUTIVE BRANCH, Continued
Office of the Attorney General 202 202 205 214 217 248 253 253 240 249
Office of the Governor 18 18 18 18 18 18 18 19 17 17
Office of the Insurance Commissioner 46 45 49 49 49 49 49 49 46 46
Office of the Labor Commissioner 12 12 12 13 13 15 15 15 14 14
Office of the State Auditor 56 56 56 55 55 61 62 62 57 57
Office of the State Tax Commissioner 133 133 133 134 134 134 135 135 132 132
Office of the State Treasurer 7 7 8 8 8 8 8 8 7 7
Oilseed Council 1 1 1 1 1 2 1 1 1 1
Parks and Recreation Department 52 53 53 53 55 65 66 65 63 62
Protection and Advocacy 28 29 29 29 28 28 28 28 28 29
Public Employees Retirement System 33 33 33 33 33 33 35 35 35 35
Public Service Commission 45 46 43 44 44 46 46 47 47 47
Retirement and Investment Office 17 18 18 18 19 19 19 19 19 20
School for the Deaf 50 50 50 50 50 51 51 51 51 51
Secretary of State 28 28 31 31 31 34 34 34 32 32
Securities Department 9 9 9 9 9 9 9 9 10 9
Seed Department 30 30 30 30 30 30 30 31 31 30
Soybean Council 5 5 6 7 7 8 8 8 7 6
State Fair Association 28 27 27 27 28 27 27 26 27 28
State Library 30 30 30 30 30 31 30 30 29 29
State Radio 0 0 0 0 0 0 0 0 0 0
Veteran's Affairs Department 7 7 8 8 8 8 9 9 9 7
Veterans Home 98 116 114 117 118 120 116 118 120 119
Water Commission 86 87 87 88 90 95 96 96 93 93
Wheat Commission 8 8 8 8 8 8 8 8 8 6
Workforce Safety and Insurance 241 251 251 254 256 266 265 265 265 267
LEGISLATIVE BRANCH
Legislative Council 34 34 34 34 36 36 37 36 36 36
JUDICIAL BRANCH
Judiciary Branch 372 342 344 362 363 364 392 392 355 363
Total State Employees 15,685 16,052 16,062 16,177 16,368 16,639 16,598 16,118 15,675 15,706
NOTE: Fulltime employees are reported as of fiscal year end. ND University System employees based on annual budgets.
Certain agencies have been reorganized, eliminated or created over the fiscal years resulting in fluctuations.
Agencies are being displayed based on the organizational structure of the State.
Sources: Office of Management and Budget, ND University System, Bank of North Dakota, Mill and Elevator, Housing Finance Agency
233
STATE OF NORTH DAKOTA Statistical Section
Schedule 15
Operating Indicators by Function
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General Government
Office of the Tax Commissioner
Number of returns filed electronically 1 242,792 289,387 319,759 352,150 383,906 412,559 428,347 391,234 460,464 447,690
Education
Department of Public Instruction
Public School Enrollment 2 94,729 95,778 99,192 101,656 104,278 106,070 106,863 108,945 110,842 112,858
North Dakota University System
Full Tme Equivalent Student Enrollment 3 38,899 39,089 38,702 38,326 38,174 38,151 37,870 37,398 36,603 35,352
Health and Human Services
North Dakota Department of Health
Number of Autopsies Performed in ND 4 300 323 367 365 261 258 244 234 239 NA
Air Quality - Percent of Facilities in Compliance 4 99 100 99 99 99 100 100 100 99 NA
Public Water Systems - Percent of Facilities in Compliance 4 96 95 96 96 95 96 98 99 98 NA
Department of Human Services
Number of TANF Caseloads 4,238 3,668 3,329 3,032 2,773 2,515 2,367 2,313 2,206 1,968
Number of Medicaid Recipients 84,529 88,618 90,453 91,382 105,539 114,364 122,374 123,766 124,371 122,304
Regulatory
Office of the Insurance Commissioner
Licensed Insurance Agents 4 49,157 50,392 52,417 55,241 61,142 65,671 74,118 75,769 79,899 70,650
Public Service Commission
Weighing and Measuring Devices Inspected 10,465 10,673 7,437 9,559 5,892 5,446 6,136 5,172 5,183 4,653
Weights and Measures Quality Assurance Inspections 0 0 0 0 166 249 216 207 160 79
Gas Pipeline Safety Inspections 67 61 53 83 127 72 81 82 78 42
Gas Pipeline Safety Inspection-Person Days 88 97 97 138 162 124 134 150 191 122
Public Safety and Corrections
Department of Corrections and Rehabilitation
Average Daily Adult Prison Population 4 1,497 1,460 1,477 1,553 1,617 1,767 1,794 1,813 1,709 NA
Office of the Attorney General-Bureau of Investigations
Criminal Cases Opened 4 410 366 422 355 478 449 558 514 339 NA
Drug Cases Opened 3 447 421 375 403 380 387 544 446 278 NA
Office of the Attorney General-Crime Laboratory
Toxicology Alcohol Blood and Breath Analyses 4 7,576 7,583 7,918 7,421 6,523 6,472 5,472 5,201 4,298 NA
Methamphetamine/Amphetamine Samples Processed 4 964 745 1,381 2,387 2,942 4,527 4,669 3,932 4,077 NA
Office of the Adjutant General
Assigned National Guard 5 4,349 4,375 4,363 4,210 4,167 4,006 3,980 4,032 4,002 4,094
Agriculture and Commerce
Department of Agriculture
Pounds of Pesticide Waste Collected 215,594 189,996 290,932 248,354 310,754 384,857 137,297 180,692 340,074 521,584
Department of Commerce
Net Job Growth from Nonfarm Employment 4 9,300 20,600 32,400 15,400 16,800 -7,700 -19,300 -3,700 2,600 NA
New Private Sector Businesses 4 667 1,627 2,301 1,414 984 397 -51 -255 -110 NA
Natural Resources
Game and Fish Department
Registered Boats 4 56,128 47,527 62,799 69,381 53,558 61,328 67,026 57,220 60,660 NA
Hunting and Fishing Licenses Issued 326,333 330,833 321,086 359,734 357,488 354,728 356,548 351,704 343,709 NA
Department of Parks and Recreation
Park Visitations 4 1,057,922 1,099,714 1,191,483 1,067,054 1,187,022 1,211,150 1,182,628 1,196,868 1,211,744 NA
Camping Nights 4 50,749 55,018 67,425 66,533 68,480 71,075 73,316 71,555 72,831 NA
Snowmobile Registrations 4 5,278 11,872 3,354 11,763 3,743 8,958 2,779 8,767 2,762 NA
OHV Registrations 4 16,335 10,841 21,862 12,198 26,200 12,753 25,316 13,673 27,148 NA
Transportation
Department of Transportation
Registered Vehicles 4 945,282 1,048,240 1,063,203 1,110,241 1,159,317 1,168,252 1,160,042 1,159,040 1,184,472 NA
Licensed Drivers 483,097 490,146 502,807 513,838 527,541 545,027 555,935 561,667 561,333 566,015
Unemployment Compensation
Job Service North Dakota
Number of Covered Workers 4 358,674 379,433 411,710 427,109 444,658 437,078 417,150 414,039 417,578 NA
Workforce Safety and Insurance
Number of Claims Filed 19,384 21,693 24,643 25,835 26,395 24,798 21,227 20,045 19,830 19,913
Number of Covered Workers 340,117 348,743 369,996 402,771 418,234 435,993 427,899 408,107 405,367 409,559
NA-Not Available
1
Calendar Year Received
2
Academic Year End Enrollment
3
Academic Year Enrollment
4
Statistics on a Calendar Year Basis
5
National Guard member count is at September 30 of each year
Sources: The State agencies listed above provided the statistics for their agency
234
STATE OF NORTH DAKOTA Statistical Section
Schedule 16
Capital Assets by Function
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General Government
Office of Management and Budget
Capitol Complex Buildings 7 7 7 7 7 7 7 7 7 7
Education
Department of Land
Common Schools Trust
Land Acreage 632,393 631,940 631,921 631,939 631,997 632,039 631,794 631,806 631,806 631,806
ND University System
Buildings 522 522 512 512 528 528 534 534 516 516
Buildings Square Footage 14,700,708 14,700,708 15,019,252 15,019,252 15,852,457 15,852,457 16,299,100 16,299,100 16,571,905 16,571,905
Health and Human Services
Dept. of Human Services
Buildings 74 74 74 64 63 63 63 63 63 63
Public Safety and Corrections
Department of Corrections
and Rehabilitation
Buildings 72 72 72 69 71 71 71 70 70 70
Office of the Adjutant General
Headquarters, Camp and Armory Buildings 282 282 283 268 280 298 298 302 330 327
Natural Resources
Game and Fish Department
Wildlife Management Areas 192 199 201 201 204 201 200 201 201 201
Boats, ATV's, Snowmobiles, Tractors,Othe 429 443 446 463 462 460 472 491 493 498
Dept. of Parks and Recreation
Park/Recreational Sites 15 15 15 15 15 15 15 15 15 15
Park Maintanenace Vehicles/Equipment 255 262 291 304 305 305 363 392 364 409
Transportation
Department of Transportation
Lane Miles Maintained 8,517 8,518 8,504 8,509 8,509 8,563 8,614 8,614 8,614 8,622
Fleet Vehicles 3,493 3,564 3,567 3,600 3,652 3,664 3,726 3,740 3,541 3,406
Heavy Equipment 463 471 500 434 441 448 441 445 479 480
Buildings 85 94 123 126 142 158 159 162 164 165
Sources: The State agencies listed above provided the data for their agency
235
STATE OF NORTH DAKOTA Statistical Section
Schedule 17
Claims Development Information
Last Ten Fiscal Years
The following tables illustrate how the individual funds' earned revenues and investment income compare to related
costs of loss and other expenses assumed by the funds as of the end of each of the last ten years. The rows of the
tables are defined as follows: (1) This line shows the total of each fiscal year’s earned contribution revenues and
investment revenues. (2) This line shows each fiscal year’s other operation costs of the fund including overhead and
claims expense not allocable to individual claims. (3) This line shows the funds' incurred claims and allocated claim
adjustment expense (both paid and accrued) as originally reported at the end of the first year in which the event that
triggered coverage under the contract occurred (called policy year). (4) This section of 10 columns shows the
cumulative amounts paid as of the end of successive years for each policy year. (5) This section of 10 columns
shows how each policy year’s incurred claims increased or decreased as of the end of successive years. This
annual re-estimation results from new information received regarding unknown claims, reevaluation of existing
information on known claims, as well as emergence of new claims not previously known. (6) This line compares the
latest re-estimated incurred claims amount to the amount originally established (line 3) and shows whether this latest
estimate of claims cost is greater or less than originally thought. As data for individual policy years mature, the
correlation between original estimates and re-estimated amounts is commonly used to evaluate the accuracy of
incurred claims currently recognized in less mature policy years. The columns of the tables show data for successive
policy years (expressed in thousands).
236
STATE OF NORTH DAKOTA Statistical Section
Schedule 17
Claims Development Information
Last Ten Fiscal Years
(Expressed In Thousands)
Bonding Fund
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1 Net Earned Required
Contribution and
Investment Revenues $ 214 $ 202 $ 195 $ 140 $ 133 $ 70 $ 173 $ 101 $ 42 $ 204
2 Unallocated Expenses 34 25 28 22 33 36 67 26 21 25
3 Estimated Incurred
Claims and Expense,
End of Policy Year 49 22 4 (115) 39 94 26 21 87 39
4 Paid (Cumulative) as of:
End of Policy Year (148) (179) (202) (157) (32) (35) (77) (86) (19) (59)
One Year Later (148) (179) (202) (157) (32) (35) (77) (86) (19)
Two Years Later (148) (179) (202) (157) (32) (35) (77) (86)
Three Years Later (148) (179) (202) (157) (32) (35) (77)
Four Years Later (148) (179) (202) (157) (32) (35)
Five Years Later (148) (179) (202) (157) (32)
Six Years Later (148) (179) (202) (157)
Seven Years Later (148) (179) (202)
Eight Years Later (148) (179)
Nine Years Later (148)
5 Reestimated Incurred
Claims and Expenses:
End of Policy Year 49 22 4 (115) 39 94 26 (21) 87 39
One Year Later 49 22 4 (115) 39 94 26 (21) 87
Two Years Later 49 22 4 (115) 39 94 26 (21)
Three Years Later 49 22 4 (115) 39 94 26
Four Years Later 49 22 4 (115) 39 94
Five Years Later 49 22 4 (115) 39
Six Years Later 49 22 4 (115)
Seven Years Later 48 22 4
Eight Years Later 48 22
Nine Years Later 48
6 Increase in Estimated
Incurred Claims and
Expense From End of
Policy Year 0 0 0 0 0 0 0 0 0 0
237
STATE OF NORTH DAKOTA Statistical Section
Schedule 17
Claims Development Information
Last Ten Fiscal Years
(Expressed In Thousands)
Fire and Tornado Fund
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1 Net Earned Required
Contribution and
Investment Revenues $ 8,099 $ 4,709 $ 3,031 $ 4,103 $ 5,388 $ (2,124) $ 2,908 $ 4,765 $ 3,567 $ 3,845
2 Unallocated Expenses 1,344 1,340 849 768 915 800 912 1,348 1,118 874
3 Estimated Incurred
Claims and Expense,
End of Policy Year 3,386 4,663 1,162 1,501 998 1,141 3,039 4,750 2,352 2,953
4 Paid (Cumulative) as of:
End of Policy Year 1,670 2,571 958 1,106 562 9,378 8,890 3,805 8,318 3,218
One Year Later 3,381 4,191 1,225 1,871 1,067 1,553 3,117 4,466 1,158
Two Years Later 3,569 4,360 1,318 1,905 1,080 1,564 3,119 4,466
Three Years Later 3,569 4,492 1,691 1,905 1,080 1,564 3,119
Four Years Later 3,569 4,492 1,691 1,905 1,080 1,564
Five Years Later 4,944 4,492 1,691 1,905 1,080
Six Years Later 4,946 4,492 1,691 1,905
Seven Years Later 4,946 4,492 1,691
Eight Years Later 4,946 4,492
Nine Years Later 4,946
5 Reestimated Incurred
Claims and Expenses:
End of Policy Year 3,386 4,663 1,162 1,501 998 1,516 3,039 4,750 2,352 2,953
One Year Later 4,323 4,502 1,550 2,009 1,146 1,725 3,292 4,692 3,153
Two Years Later 4,873 4,528 1,549 2,012 1,122 1,723 3,229 4,634
Three Years Later 4,865 4,520 1,711 2,012 1,122 1,723 3,226
Four Years Later 4,864 4,520 1,711 2,012 1,122 1,723
Five Years Later 4,944 4,516 1,711 2,012 1,122
Six Years Later 4,946 4,516 1,711 2,012
Seven Years Later 4,946 4,516 1,711
Eight Years Later 4,946 4,516
Nine Years Later 4,946
6 Increase in Estimated
Incurred Claims and
Expense From End of
Policy Year 1,559 (147) 549 511 125 582 191 (58) 0 0
238
STATE OF NORTH DAKOTA Statistical Section
Schedule 17
Claims Development Information
Last Ten Fiscal Years
(Expressed In Thousands)
Workforce Safety & Insurance
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1 Net Earned Required
Contribution and
Investment Revenues $ 289 $ 357 $ 341 $ 443 $ 502 $ 408 $ 377 $ 396 $ 343 $ 386
2 Unallocated Expenses 33 30 33 52 41 41 43 47 44 45
3 Estimated Incurred
Claims and Expense,
End Of Policy Year 160 192 230 300 338 315 229 198 193 187
4 Paid (Cumulative) as of:
End of Policy Year 31 39 44 53 65 61 41 40 42 42
One Year Later 52 65 87 99 111 102 74 65 68
Two Years Later 60 76 102 117 128 120 84 73
Three Years Later 65 85 111 128 140 132 84
Four Years Later 69 90 116 136 148 140
Five Years Later 73 94 120 142 154
Six Years Later 76 96 123 146
Seven Years Later 77 98 125
Eight Years Later 78 100
Nine Years Later 79
5 Reestimated Incurred
Claims and Expenses:
End of Policy Year 160 192 230 300 338 315 229 198 192 187
One Year Later 151 192 258 293 321 283 204 177 179
Two Years Later 195 193 344 288 299 271 191 164
Three Years Later 193 187 241 272 291 267 174
Four Years Later 142 174 228 266 285 265
Five Years Later 139 181 221 261 277
Six Years Later 137 174 214 253
Seven Years Later 134 171 206
Eight Years Later 132 164
Nine Years Later 126
6 Increase in Estimated
Incurred Claims and
Expense From End of
Policy Year (34) (28) (24) (47) (61) (50) (54) (34) (14) -
239
STATE OF NORTH DAKOTA Statistical Section
Schedule 18
Agricultural Production
Value of Export Shares of Agricultural Commodities - 2017 - 2018
2017 2017 2018 2018
Dollars % of U.S. Dollars % of U.S.
(Mil.) (Mil.)
Wheat 1,060.9 17.02 950.2 17.63
Soybeans and Products 1,244.7 4.91 1,153.5 5.20
Other Oil Seeds and Products 600.4 28.77 550.2 26.01
Vegetables Fresh and Processed 244.3 18.70 238.5 3.44
Grain Products 190.3 4.65 191.7 4.54
Vegtable Oils 189.8 6.40 177.4 6.41
Feeds and Other Feed Grains 239.5 2.77 241.0 2.65
Corn 251.3 2.76 337.7 2.71
Other Plant Products 174.9 1.01 185.8 1.07
Beef, Veal and Pork 128.0 0.93 145.5 0.67
Other Livestock Products 41.2 1.35 44.3 1.47
Hides and Skins 23.1 1.22 18.0 1.23
Dairy Products 8.5 0.16 8.3 0.15
Poultry Products 2.8 0.13 3.8 0.18
Total $ 4,399.7 3.19% $ 4,245.9 3.06%
1/ Includes other nonpoultry meats, animal fat, live farm animals, and other animal parts.
2/ Includes turkey meat, eggs, and other fowl products.
3/ Includes processed feeds, fodder, barley, oats, rye, and sorghum.
4/ Includes peanuts (oilstock), other oil crops, corn meal, other oilcake and meal,
protein substances, bran and residues.
5/ Includes sweeteners and products, other horticulture products, planting seeds, cocoa,
coffee, and other processed foods.
Data sources: USDA Economic Research Service; USDA Foreign Agricultural Service (Global Agricultural Trade System).
Totals may not add due to rounding.
2019 Crop Rank Among States
North Dakota North Dakota
Ranks Crop Description Produces
1st Canola 86%
Flaxseed 85%
Pinto Beans 61%
Durum Wheat 55%
Spring Wheat 51%
Dry Edible Peas 50%
Navy Beans 40%
All Dry Edible Beans 29%
Honey Production 25%
All Wheat 19%
Oats 15%
Source: North Dakota Agricultural Statistics August 2018
240
NORT H
DakotaBe Legendary.™
20 0 C
2020 CAA Ff RR
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
Photo Credit: ND Tourism
STATE OF NORTH DAKOTA
Comprehensive Annual
Financial Report
FOR THE FISCAL YEAR ENDED
June 30, 2020
Prepared by the Office of Management and Budget
State of North Dakota
Office of Management and Budget
Fiscal Management Division
600 East Boulevard Avenue Dept. 110
Bismarck, ND 58505-0400
701-328-2680
This CAFR is also available at our Fiscal Management website:
https://www.nd.gov/omb/agency/financial/comprehensive-annual-financial-report-cafr/cafr-reports
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
Letter of Transmittal .....................................................................................................................................7
Certificate of Achievement for Excellence in Financial Reporting .............................................................13
North Dakota State Government Organization Chart ................................................................................14
List of Principal State Officials....................................................................................................................15
FINANCIAL SECTION
Independent Auditor's Report ...........................................................................................................18
Management’s Discussion and Analysis ........................................................................................22
Basic Financial Statements:
Government-wide Financial Statements
Statement of Net Position ..........................................................................................................34
Statement of Activities ..............................................................................................................36
Statement of Net Assets – Component Units FASB Basis ........................................................38
Statement of Revenues, Expenses and Changes in Fund Net Assets –
Component Units FASB Basis ............................................................................................. 39
Governmental Fund Financial Statements
Balance Sheet............................................................................................................................40
Reconciliation of the Balance Sheet—Governmental Funds to the
Statement of Net Position .....................................................................................................41
Statement of Revenues, Expenditures, and Changes in Fund Balances..................................42
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances ..................................................................................................................43
Proprietary Fund Financial Statements
Statement of Net Position ..........................................................................................................44
Statement of Revenues, Expenses, and Changes in Fund Net Position ..................................46
Statement of Cash Flows ...........................................................................................................48
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position ..........................................................................................52
Statement of Changes in Fiduciary Net Position .......................................................................53
Component Unit Financial Statements
Combining Statement of Net Position ........................................................................................54
Combining Statement of Activities .............................................................................................55
Notes To The Financial Statements ..................................................................................................56
Required Supplementary Information Other Than Management’s Discussion and Analysis
Budgetary Comparison Schedule – General Fund ..........................................................................148
Budgetary Comparison Schedule – Budget to GAAP Reconciliation General Fund .......................149
Budgetary Comparison Schedule – Federal Funds .........................................................................150
Budgetary Comparison Schedule – Budget to GAAP Reconciliation Federal Fund .......................151
1
Page
Budgetary Comparison Schedule – State Funds.............................................................................152
Budgetary Comparison Schedule – Budget to GAAP Reconciliation State Fund ...........................153
Note to Required Supplementary Information – Budgetary Reporting ............................................154
Schedule of State’s Share of Net Pension Liability NDPERS .........................................................155
Schedule of State’s Contributions NDPERS....................................................................................155
Schedule of State’s Share of Net Pension Liability HPRS ..............................................................156
Schedule of State’s Contributions HPRS.........................................................................................156
Schedule of State’s Share of Net Pension Liability JSND ...............................................................157
Schedule of State’s Contributions JSND .........................................................................................157
Schedule of State’s Share of Net Pension Liability TFFR ...............................................................158
Schedule of State’s Contributions TFFR .........................................................................................158
Schedule of State’s Share of OPEB Liability RHIC .........................................................................159
Schedule of State’s Contributions RHIC ..........................................................................................159
Schedule of Changes in Net Pension Liability and Related Ratios NDPERS .................................160
Schedule of Changes in Net Pension Liability and Related Ratios HPRS ......................................162
Schedule of Changes in Net Pension Liability and Related Ratios JSND .......................................164
Schedule of Changes in Net Pension Liability and Related Ratios TFFR .......................................166
Schedule of Changes to the Net Other Post Employment Benefit Liability and Related Ratios
RHIC Fund ..................................................................................................................................168
Schedule of Changes to the Net Other Post Employment Benefit Liability and Related Ratios
Met Life Insurance Plan ..............................................................................................................169
Schedule of Employer Contributions NDPERS ...............................................................................170
Schedule of Employer Contributions HPRS ....................................................................................170
Schedule of Employer Contributions JSND .....................................................................................171
Schedule of Employer Contributions TFFR .....................................................................................171
Schedule of Employer Contributions RHIC ......................................................................................172
Information About the State’s Pension and Other Post Employment Benefit Plans........................173
Combining and Individual Fund Statements:
Combining Balance Sheet – Nonmajor Governmental Funds .........................................................183
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance –
Nonmajor Governmental Funds...............................................................................................184
Combining Statement of Net Position – Nonmajor Enterprise Funds..............................................188
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position –
Nonmajor Enterprise Funds .....................................................................................................192
Combining Statement of Cash Flows – Nonmajor Enterprise Funds ..............................................199
Combining Statement of Net Position – Internal Service Funds ......................................................203
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position –
Internal Service Funds .............................................................................................................204
Combining Statement of Cash Flows – Internal Service Funds ......................................................205
Combining Statement of Fiduciary Net Position – Pension, Investment, and
Private-Purpose Trust Funds ...................................................................................................210
Combining Statement of Changes in Fiduciary Net Position – Pension, Investment,
and Private-Purpose Trust Funds ............................................................................................214
Combining Statement of Fiduciary Assets and Liabilities – Agency Funds .....................................217
Combining Statement of Changes in Assets and Liabilities – Agency Funds .................................218
2
STATISTICAL SECTION
Net Position by Component .....................................................................................................................222
Changes in Net Position...........................................................................................................................224
Fund Balances, Governmental Funds .....................................................................................................226
Changes in Fund Balances, Governmental Funds ..................................................................................228
Taxable Sales by Industry ........................................................................................................................230
Sales Tax Revenue Payers by Industry ...................................................................................................230
Ratios of Outstanding Debt by Type ........................................................................................................232
Pledged Revenue Coverage ....................................................................................................................234
Legal Debt Limit .......................................................................................................................................236
Demographic and Economic Indicators ...................................................................................................237
Principal Employers .................................................................................................................................238
Employment by Industry...........................................................................................................................238
Education Enrollment ...............................................................................................................................239
State Employees by Agency ....................................................................................................................240
Operating Indicators by Function .............................................................................................................242
Capital Assets by Function.......................................................................................................................243
Claims Development Information .............................................................................................................244
Agricultural Production .............................................................................................................................248
3
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4
State of North Dakota
Introductory Section
5
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6
NORTH
Dakota I Management
and Budget
Be Legendary.-
December 10, 2020
To the Governor, Legislators and Citizens of the State of North Dakota:
In accordance with North Dakota Century Code (NDCC) section 54-44-04(14), we are pleased to submit the
Comprehensive Annual Financial Report (CAFR) of the State of North Dakota for the fiscal year ended June 30,
2020. This report has been prepared by the Office of Management and Budget. The financial statements contained
in the CAFR have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to
state and local governments, as promulgated by the Governmental Accounting Standards Board (GASB).
Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all
disclosures, rests with the state's management. To the best of our knowledge and belief, the information contained
in the CAFR is accurate in all material respects and reported in a manner that presents fairly the financial position
and results of operations of the State’s primary government and the component units for which it is financially
accountable. All disclosures necessary to enable the reader to gain an understanding of the State of North Dakota's
financial affairs have been included.
The state’s management is responsible for establishing and maintaining an internal control structure designed to
ensure that the assets of the government are protected from loss, theft or misuse and to ensure that adequate
accounting data are compiled to allow for the preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America. The internal control structure is designed to provide
reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance
recognizes that (1) the costs of a control should not exceed the benefits likely to be derived and (2) the valuation of
costs and benefits requires estimates and judgments by management.
In compliance with state statute, the Office of the State Auditor (SAO) audited the State’s financial statements. The
goal of the independent audit was to provide reasonable assurance that the financial statements of the State for the
fiscal year ended June 30, 2020 are free of material misstatement. The independent audit involved examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and evaluating the overall financial statement presentation. Their examination was conducted in
accordance with GAAP and the standards applicable to financial audits contained in Government Auditing Standards
as published by the Comptroller General of the United States. The SAO concluded, based upon the audit, that there
was a reasonable basis for rendering an unmodified opinion that the State’s financial statements for the fiscal year
ended June 30, 2020, are fairly presented in conformity with GAAP. The independent auditor’s report is presented
as the first component of the financial section of this report
The State of North Dakota is also required to undergo a single audit in conformity with the provision of the Single
Audit Act Amendments of 1996 and the Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (contained in Title 2 U.S. Code of Federal Regulations Part 200). Information
related to this single audit, including a schedule of expenditures of federal awards, the independent auditor's reports
on internal controls and compliance with applicable laws and regulations, and a schedule of findings and questioned
costs, are included in a separately issued biennial single audit report.
Management’s Discussion and Analysis (MD&A) immediately follows the Independent Auditor’s Report and provides
a narrative introduction, overview and analysis of the basic financial statements. This letter of transmittal is intended
to complement MD&A and should be read in conjunction with it.
600 E Boulevard Ave, Dept 110 | Bismarck, ND 58505-0400 | nd.gov/omb
DIRECTOR CENTRAL FACILITY FISCAL HUMAN RESOURCE RISK
& ADMINISTRATION SERVICES MANAGEMENT MANAGEMENT MANAGEMENT SERVICES MANAGEMENT
1600 E Century Ave, Suite 4
4th Floor | 14th Floor | 4th Floor | 4th Floor | 14th Floor | Bismarck, ND 58503
701.328.4904 701.328.2740 701.328.2471 7 701.328.2680 701.328.3293 701.328.7584
PROFILE OF THE GOVERNMENT
The State of North Dakota provides for a full range of services, including education, health and social
services, highway maintenance and construction, law enforcement, judicial, public safety, business regulation,
community and economic development, and natural resource development. The State’s reporting entity
reflected in the CAFR includes all the funds of the state as legally defined, as well as all of its component units
in conformity with the requirements of GASB Statement No. 61. Statement No. 61 provides that the financial
statements should emphasize the primary government and permit financial statement users to distinguish
between the primary government and its component units. Consequently, the transmittal letter, MD&A, and
the financial statements focus on the primary government and its activities. Although information pertaining to
the discretely presented component units is provided, their separately issued financial statements should be
read to obtain a complete overview of their financial position. The State’s reporting entity is described more
fully in Note 1A to the basic financial statements.
The State operates through a biennial appropriation, which represents agency appropriations recommended by
the governor and presented to the Legislative Assembly at the beginning of each legislative session. The budget
is legally required to be adopted through passage of appropriation bills by the Legislative Assembly and signed
by the governor. The governor has line item veto powers over all appropriations subject to legislative override.
Once passed and signed, the appropriation bill becomes the departments' financial plan for the next two years.
Changes to the appropriation are limited to Emergency Commission authorization, initiative, allotment, or
referendum action.
The State does not budget by fund nor does it formally budget revenues. The legal level of budgetary control is
at the agency, appropriation authority and expenditure line item level. The State's budgetary policies and
procedures are further explained in Note 1D on the notes to the basic financial statements.
LOCAL ECONOMY
Although North Dakota’s economy is increasingly diversified, the agricultural industry continues to play a key
role in the state’s economy. The USDA’s National Agricultural Statistics Service reports that for 2019 crop
production, North Dakota led the nation in production of all dry edible beans, pinto beans, canola, flaxseed,
honey, oats, non-oil sunflower, Durum wheat, and spring wheat. North Dakota also ranked second in the
production of black beans, navy beans, lentils, dry edible peas, all sunflowers, oil sunflowers, and all wheat.
The energy industry plays an important role in the state’s economy. The development of wind and coal
resources, the production of ethanol and bio-diesel, and oil and natural gas extraction all contribute to the state’s
economy. North Dakota reached an all-time high for oil production which averaged over 1.52 million barrels of
oil produced per day in November 2019. North Dakota’s current crude oil production ranks second in the nation,
behind first-ranked Texas. Oil prices have rebounded since the crash of oil prices at the end of fiscal year 2020
when North Dakota producers were receiving prices below $15 per barrel. Prices averaged around $50 per
barrel at the start of the 2019-21 biennium before the crash. In September 2020, the actual average price per
barrel for North Dakota oil was $32.83, below the estimated price of $48.00 used for budgeting purposes.
According to the United States Census Bureau, the state’s estimated population for 2019 was approximately
762,000 people, which is an all-time high. Health care and social assistance jobs account for the highest percent
of employment in the state. Other leading areas of employment are retail trade, accommodation and food
services, educational services, construction and manufacturing. The unemployment rate for the state in October
2020 was 4.0%, compared to 6.6% for the United States.
A listing of the state’s 20 largest employers demonstrates the diversity of the economy. Top employers include:
health care providers, the state university system, the U.S military, manufacturers, financial and insurance
companies, U.S postal service, information technology companies, mining, energy producers, and retail
companies.
8
Uncertainty within international markets, resulted in a decrease in exporting in North Dakota in 2019. The United
States Census Bureau showed that North Dakota’s exports were down overall by about $1.1 billion for a total
of $6.7 billion in 2019. This represents a decrease of 14.5% over 2018.
LONG-TERM FINANCIAL PLANNING
The long-term financial plan for the state of North Dakota was outlined by Governor Burgum as part of the 2019-
21 executive budget address, presented to the legislature in December 2018. The Governor’s long-term
financial plan includes the following key components:
x Balancing ongoing revenues and expenses of state government
x Rebuilding reserves.
x Ensuring solvency for the state pension fund.
North Dakota is required by its Constitution to have a balanced budget. However, ongoing revenues and
ongoing expenses have not always been in balance. In those instances where ongoing revenues did not meet
the obligations of ongoing expenses of state government, one-time transfers from accumulated reserves and
fund balances were used to fill the gap. In nearly all cases, those accumulated reserves and fund balances
were directly attributable to oil and natural gas extraction and production tax revenue. In the 2019-21 biennium
executive budget, the governor laid out a financial plan that not only balanced ongoing revenues and expenses
but did so by adding transparency to the use of oil tax revenue. In the executive budget, the state general fund
allocation of oil and gas taxes increased from $400 million to $1 billion per biennium, but no transfers from
accumulated fund balances were proposed. Both the 2013-15 and 2015-17 biennium budgets included general
fund revenues and transfers in excess of $1 billion that were directly funded from oil and gas tax revenue.
The legislature did not approve the proposed transfer of $1 billion per biennium from oil tax revenues to the
general fund, opting to continue it at the level of $400 million per biennium. The legislature instead chose to
balance the general fund budget with transfers from accumulated oil tax revenues. Although this approach
provides less transparency and obscures the state’s ongoing revenue and expense structure, it ensures overall
revenue sources are adequate to fund ongoing government expenses. It provides a conservative approach to
funding the budget as the accumulated balances transferred to the general fund are balances on hand at the
start of the biennium and not dependent on forecasted tax revenues.
The state’s rainy-day fund, the Budget Stabilization Fund, was nearly depleted during the 2015-17 biennium
economic downturn. The 2019-21 executive budget proposed to fully replenish this fund to its maximum balance
allowed by law, which is 15% of general fund appropriations. This included a proposed transfer of over $300
million from the Strategic Investment and Improvements Fund. A critical component of ensuring the long-term
financial well-being of the state of North Dakota is a well-funded Budget Stabilization Fund that provides a
necessary buffer against volatile commodity prices that drive ups and downs in the state’s economy.
The legislature did not approve the transfer of $300 million to the Budget Stabilization Fund. However, the
revenue forecast adopted by the legislature proved so conservative that actual revenues ended the biennium
$250 million higher than predicted. North Dakota law requires any end of biennium balance in the general fund
in excess of $65 million to be transferred to the Budget Stabilization Fund. As a result, $548 million was
transferred to the Budget Stabilization Fund, pushing the balance above $660 million. It reached its $726 million
cap in March 2020 with a statutorily required transfer of oil tax revenues. Although state tax revenues have
been negatively impacted by the COVID-19 pandemic, other state revenues such as Legacy fund earnings have
been unaffected. It is anticipated the state will finish the 2019-21 biennium with total revenues that exceed the
original forecast and without accessing the budget stabilization fund to offset a revenue shortfall.
Another component of the state’s long-term financial plan is ensuring the solvency of the state’s pension fund.
The governor proposed restoring solvency to the fund through a combination of policy proposals that reformed
the benefit and funding structure, along with a one-time cash infusion into the fund. The proposed one-time
cash infusion was a transfer of $265 million at the beginning of the 2019-21 biennium from the Strategic
Investment and Improvements Fund to the Public Employees Retirement Fund.
9
Although the legislature did not approve the proposed cash infusion of $265 million, the legislature did adopt
separate proposals that reformed the benefit structure and had a positive impact on the long-term actuarial
projections for the fund.
The backbone of the state’s financial plan is a revenue forecasting process that is accurate, conservative, and
credible. The state utilizes a Revenue Forecasting Advisory Committee, comprised of representatives of the
major industries in the state and the legislative and executive branches of government, along with the expertise
of a national economic forecasting consultant. With the assistance of these experts, the state’s Tax Department
and Office of Management and Budget develop a conservative revenue forecast for use in the budgeting
process.
The budgeting process begins with the development of a biennial budget proposal reflecting the Governor’s
priorities for the next two years. The budget is submitted to the legislature for their consideration and eventual
enactment. With a biennial budget cycle, each revenue forecast and budget proposal provides a three-year plan
for the revenues and expenditures of state government.
RELEVANT FINANCIAL POLICIES
North Dakota’s financial policies ensure that in the event of an economic downturn, North Dakota state
government will be able to continue to provide its citizens with necessary services. Should North Dakota
experience a significant revenue shortfall, the state is able to access funds in the budget stabilization fund. The
statutory maximum balance for the budget stabilization fund is 15.0 percent of the state general fund budget.
North Dakota experienced a significant revenue shortfall during the 2015-17 biennium due to decreases in oil
and agriculture prices, resulting in a transfer of nearly the entire balance of the budget stabilization fund to the
general fund prior to June 30, 2017. The 2017 legislature established an ongoing allocation of $75 million per
biennium from oil and gas tax revenues to the budget stabilization fund. North Dakota Century Code requires
the transfer to the budget stabilization fund of any end-of-biennium general fund balance in excess of $65
million. The 2017-19 biennium ended with revenues exceeding the forecast and resulted in the transfer of $548
million to the budget stabilization fund. The balance of the budget stabilization fund is estimated to be over
$726 million by June 30, 2021 due to a combination of existing fund balance and additional oil tax revenue
allocations.
In addition to accessing the budget stabilization fund, in the event of an economic downturn the Governor can
reduce general fund expenditure authority uniformly across state agencies through a process known as
allotment. In the event of an allotment, the foundation aid stabilization fund was established to protect the state
school aid program. Dollars from this fund would replace the amount of general fund dollars allotted, thus K-12
education would not experience a reduction in funding. The passage of Measure 2 in the 2016 general election
allowed money in the fund to be appropriated for education-related purposes. Funding for the foundation aid
stabilization fund comes from 10 percent of oil extraction tax collections. The foundation aid stabilization fund
is expected to have a June 30, 2021 balance in excess of $443 million.
MAJOR INITIATIVES
Major initiatives proposed by Governor Doug Burgum and approved by the legislature for the 2019-21 biennium
include:
x Investing in infrastructure and other priorities;
x Continued funding of Medicaid expansion;
x Investing in behavioral health issues;
x Transitioning the cost of county social services to the state; and
x Building reserves and filling the rainy-day fund.
10
INFRASTRUCTURE INVESTMENTS
The 2019-21 biennial budget includes funding to rebuild and repair roads throughout the state, for water supply
and flood control, capital projects for state parks and grants for airports. Funding for infrastructure improvements
includes:
x $613.9 million to rebuild and repair state highways;
x $97.8 million for city road projects;
x $53.2 million dedicated to the repair and rebuilding of county and township roads;
x $6.8 million for projects across the state park system;
x $40 million in grant funds to two communities in oil country for airports; and
x $968.2 million for water-related projects, including $128.0 million for water supply, $37.2 million for rural
water supply, $197.0 million for flood control, $27.1 million for general water projects, $65.1 million for
state-owned water projects and $74.0 million for other new projects.
TAX RELIEF
The legislature approved, and the Governor signed into law, a tax relief package that provides:
x $173.7 million for a state-paid economic assistance and social services pilot program for the 2019-21
biennium;
x $15.8 million for the homestead tax credit program; and
x $8.4 million for the disabled veteran’s property tax credit.
EDUCATION
K-12 education initiatives include:
x $2.10 billion in state funding for K-12 schools through integrated funding formula;
x $3 million in grants to districts experiencing rapid enrollment growth;
x $56.5 million to assist districts in the provision of transportation services;
x $24 million to go towards special education contracts; and
Higher Education initiatives include:
x $10.7 million for the UND Healthcare Workforce Initiative.
x $9.4 million in state funding to continue the North Dakota Higher Education Challenge Grant Program,
to encourage philanthropy by providing a state match for private contributions to the state’s colleges and
universities.
x $458.4 million is slated to be invested for capital projects across the system, with funding from revenue
bonds, private donations, capital building funds and carryover authority.
RESERVES
It is anticipated that by June 30, 2021, there will be a total ending balance of approximately $2.36 billion in the
budget stabilization fund, foundation aid stabilization fund, strategic investment and improvements fund, and
tax relief fund. The general fund budget for the 2019-21 biennium totals $4.84 billion
11
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the State of North Dakota for its comprehensive annual
financial report for the fiscal year ended June 30, 2019. This was the 28th consecutive year that the government
has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must
publish an easily readable and efficiently organized comprehensive annual financial report. This report must
satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive
annual financial report continues to meet the Certificate of Achievement Program’s requirements, and we are
submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the State of North Dakota received the GFOA’s Award for Distinguished Budget Presentation for its
2019-2021 budget. In order to qualify for the Distinguished Budget Presentation Award, the State’s budget
document was judged to be proficient in several categories, including policy documentation, financial planning,
and organization.
This report was prepared by staff members of the Fiscal Management Division of the Office of Management
and Budget. Their dedication and efforts are greatly appreciated. We also extend our gratitude to the numerous
individuals from virtually all the state agencies and institutions, especially the Office of the State Auditor, for
their assistance.
Sincerely,
Joe Morrissette
Director
12
•
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
State of North Dakota
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
Executive Director/CEO
13
STATE OF NORTH DAKOTA ORGANIZATIONAL CHART
The
Electorate
Legislative Executive Judicial
14
Legislature Superintendent Commissioner Attorney State State Governor Lieutenant Commissioner Secretary State Tax Public Supreme
of Public of General Auditor Treasurer Governor of of Commissioner Service Court of
Instruction Insurance Agriculture State Commission North
Dakota
Legislative Governing Trial Courts
Council & Boards &
Committees Commissions
State
Agencies
Ag/Commerce Education General Health & Transportation Natural Res. Public Safety Regulatory University
Government Human Services & Recreation & Corrections Agencies System
NORTH DAKOTA
PRINCIPAL STATE OFFICIALS
June 30, 2020
ELECTED OFFICIALS
Doug Burgum, Governor
Brent Sanford, Lieutenant Governor
Alvin A. Jaeger, Secretary of State
Wayne Stenehjem, Attorney General
Julie Fedorchak, Public Service Commissioner
Randel Christmann, Public Service Commissioner
Brian Kroshus, Public Service Commissioner
Doug Goehring, Commissioner of Agriculture
Josh Gallion, State Auditor
Jon Godfread, Commissioner of Insurance
Kirsten Baesler, Superintendent of Public Instruction
Ryan Rauschenberger, Tax Commissioner
Kelly Schmidt, State Treasurer
LEGISLATIVE
Lawrence R. Klemin, Speaker of the House
Chet Pollert, House Majority Leader
Joshua A. Boschee, House Minority Leader
Lt. Gov. Brent Sanford, President of the Senate
Rich Wardner, Senate Majority Leader
Joan Heckaman, Senate Minority Leader
JUDICIAL
Jon Jensen, Chief Justice, North Dakota Supreme Court
Gerald W. VandeWalle, Justice
Daniel J. Crothers, Justice
Lisa K Fair McEvers, Justice
Jerod Tufte, Justice
15
(This page left blank intentionally.)
16
State of North Dakota
Financial Section
17
STATE AUDITOR PHONE
J05huo C. Gallion 701-328-224 1
FAX
l0i-328-2345
SlAlE O F NORTH DAKOTA
W\¥W.nd go,1/oud1tor OFFICE OF THE STA TE A UDITOR
STA TE CAPITOL ndsoo<e)nd .go\
600r Bouleva rd Ave Depl 117
Bismarck. North Dakota 58505
Independent Auditor's Report
The Honorable Doug Burgum, Governor Members of the Legislative Assembly
of the State of North Dakota of the State of North Dakota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major fund,
and the aggregate remaining fund information of the State of North Dakota as of and for the year
ended June 30, 2020, and the related notes to the financial statements, which collectively
comprise the State's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
did not audit the financial statements of the following state entities and discretely presented
component units:
Addiction Counselor Internship Loan Program Job Service North Dakota
Bank of North Dakota Mandan Remediation Trust
Beginning Farmer Revolving Loan Fund Medical Facility Infrastructure Loan Program
Building Authority PACE and AG PACE Funds
College SAVE Public Employees Retirement System
Community Water Facility Loan Fund Public Finance Authority
Comprehensive Health Association of North Rebuilders Loan Program
Dakota Retirement and Investment Office
Covid Pace Recovery Program School Construction Assistance Revolving Loan
Department of Trust Lands Fund
North Dakota Development Fund Small Employer Loan Fund
Guaranteed Student Loan Program State Fair Association
Housing Finance Agency State Historical Society of North Dakota
Housing Incentive Fund Foundation
Infrastructure Revolving Loan Fund Student Loan Trust
Innovation Technology Fund Workforce Safety and Insurance
18
The financial statements of the above entities reflect total assets, net position or fund balance,
and revenues of the government-wide financial statements and fund financial statements as
follows:
Percent of Percent of Net Percent of
Assets Position or Revenues
Fund Balance
Government-Wide Financial
Statements
Governmental Activities 25% 27% 4%
Business-Type Activities 81% 64% 62%
Aggregate Discretely Presented
Component Units 100% 100% 100%
Fund Financial Statements
Major Governmental Funds
General Fund 0% 0% 0%
Federal Fund 1% 51% 1%
State Special Revenue Fund 73% 75% 16%
Major Enterprise Funds
Bank of North Dakota 100% 100% 100%
Housing Finance Agency 100% 100% 100%
University System 0% 0% 0%
Workforce Safety and Insurance 100% 100% 100%
Aggregate Remaining Fund
Statements 93% 97% 83%
The financial statements for these entities were audited by other auditors whose reports have
been furnished to us, and our opinions, insofar as they relate to the amounts included for these
entities, are based solely on the reports of the other auditors. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement. The financial statements of the North Dakota University System's
discretely presented component units (foundations) were not audited in accordance with
Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments , the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
19
Opinions
In our opinion, based on our audit and the report of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, the business-type activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the State of
North Dakota, as of June 30, 2020, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Emphasis of Matter
The actuary for the North Dakota Public Employees Retirement System has determined that the
Fund's unfunded actuarial accrued liability is approximately $1.456 billion as of July 1, 2020.
The funding for the actuarial accrued liability is predicated on employer and employee funding
rates mandated by North Dakota statutes. The actuary has determined that the current statutory
rates are insufficient compared to the actuarially determined contribution rate needed to fund
the actuarial accrued liability. Note 6 identifies the net pension liability as calculated using
GASB 67 and 68 requirements. Our opinion is not modified with respect to this matter.
As discussed in Note 17 to the basic financial statements, the Bank of North Dakota elected to
present an unclassified statement of net position because current assets were not matched with
current liabilities. Presentation of a classified statement of net position would give the false
impression that there is a liquidity problem at the bank. Presentation of a classified statement of
net position for the Bank of North Dakota would be misleading to the extent that the financial
statements may be materially misstated. Our opinion is not modified with respect to this matter.
As described in Note 22 to the financial statements, the State of North Dakota adopted the
provisions of GASB 95 Postponement of the Effective Dates of Certain Authoritative Guidance.
Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison schedules and related
reconciliations and notes, information about the state of North Dakota's pension plans and other
post-retirement benefits, as listed in the table of contents be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
20
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the State of North Dakota's basic financial statements. The combining and
individual fund financial statements listed in the table of contents are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual fund financial statements listed in the table of contents is the
responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the combining and individual fund financial statements and schedules
listed in the table of contents are fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
The introductory and statistical sections, as listed in the table of contents have not been subjected
to the auditing procedures applied in the audit of the basic financial statements, and accordingly,
we do not express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 10, 2020 on our consideration of the State of North Dakota's internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is solely to
describe the scope of our testing of internal control over financial reporting and compliance and
the results of that testing, and not to provide an opinion on the effectiveness of the State of North
Dakota's internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards in considering the State
of North Dakot 's internal control over financial reporting and compliance.
'
~~~ ~
uditor
rck, North Dakota
ber10, 2020
21
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the State of North Dakota’s (the State’s) Comprehensive Annual Financial Report presents
a discussion and analysis of the State’s financial performance, providing an overview of the activities for
the fiscal year ended June 30, 2020. Please read it in conjunction with the transmittal letter at the front of
this report and with the State's financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
Government-wide:
Total assets and deferred outflows of resources of the State exceeded its liabilities and deferred inflows of
resources at fiscal year-end by $26.1 billion (reported as net position), an increase of $1.4 billion from the
previous year. The net position of governmental activities increased by 4.6% while the net position of the
business-type activities showed an increase of 10.8%.
As a result of implementing GASB Statement 68, Accounting and Financial Reporting for Pensions, the
State recorded $31 million net pension asset, $290.1 million deferred outflows of resources, $603.9 million
net pension liability, and $337.5 million deferred inflows of resources for the primary government. The State
decreased its net pension liability by $283.6 million during the year.
Fund Level:
As of the close of fiscal year 2020 the State’s governmental funds reported combined ending fund balances
of $16.5 billion, an increase of $760 million. Of this amount, $109.5 million is non-spendable, primarily for
Permanent Trust Funds. Spendable fund balance consists of $6.4 billion restricted for specific purposes
such as common schools, highway projects, and state education aid, $1.9 billion committed and $419.7
million assigned for specific functional expenditures such as education and health and human service
operations, with the unassigned fund balance making up the remaining amount of $7.7 billion, which is
primarily made up of the legacy fund with a balance of $7 billion.
The enterprise funds reported net position at year-end of $4.6 billion, an increase of $446.7 million during
the year.
Long-term Debt:
The State’s total debt (bonds, certificates of participation, and notes payable) decreased approximately
12.2% during the fiscal year to $2.5 billion, a decrease of $341 million, which represents the net difference
between new issuances and payments. During the year the State issued $269 million in bonds, $7.3 million
in certificates of participation, and $6.3 billion in notes.
More detailed information regarding these activities and funds is included in Note 3L.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is an introduction to the State’s basic financial statements, which consists of
three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to
the financial statements. This report also contains other supplementary information in addition to the basic
financial statements.
Government-wide Statements
The government-wide financial statements provide a broad view of the State’s operations in a manner
similar to a private-sector business. The statements provide both short-term and long-term information
about the State’s financial position, which assists in assessing the State’s economic condition at the end of
the fiscal year. These statements include all non-fiduciary assets, deferred outflows of resources, liabilities,
and deferred inflows of resources using the accrual basis of accounting. The current year’s revenues and
expenses are taken into account regardless of when cash is received or paid.
22
The Statement of Net Position presents all of the State’s assets, deferred outflows of resources, liabilities,
and deferred inflows of resources, with the difference between the two reported as “net position”. Over time,
increases and decreases in net position is an indicator of whether the State’s financial position is improving
or deteriorating.
The Statement of Activities presents information showing how the State’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying events giving
rise to the change occur, regardless of the timing of related cash flows. Therefore, revenues and expenses
are reported in these statements for some items that will only result in cash flows in future fiscal periods
(e.g., uncollected taxes and earned but unused vacation leave).
Both statements report three activities:
Governmental Activities – The activities in this section are primarily supported by taxes and
intergovernmental revenue. Most of the State’s basic services, such as education, health and human
services and transportation, are reported under this category.
Business-type Activities – These functions are intended to recover all or a significant portion of their costs
through user fees and charges to external users of goods and services. The Bank of North Dakota, Housing
Finance Agency and the University System are examples of the State’s business-type activities.
Discretely Presented Component Units – These are operations for which the State has financial
accountability but they have certain independent qualities as well. These entities operate similar to private-
sector business and the business-type activities described above. The State has 4 discretely presented
component units. Financial information for these entities is presented separately from the financial
information presented for the primary government.
The government-wide financial statements can be found immediately following this discussion and analysis.
Fund Financial Statements
A fund is a fiscal and accounting entity with a self-balancing set of accounts that the State uses to keep
track of specific sources of funding and spending for a particular purpose. The State, like other state and
local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal
requirements.
The basic fund financial statements begin after the Component Unit FASB basis statements and provide
more detail about the major individual funds. The State's funds are divided into three categories –
governmental, proprietary, and fiduciary. It is important to note that these fund categories use different
accounting approaches and should be interpreted differently.
Governmental funds - Most of the State's basic services are reported in the governmental funds.
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, the governmental fund financial statements focus on the near-term inflows and outflows of
spendable resources. They also focus on the balances left at year-end that are available for future
spending. Such information may be useful in evaluating whether there are more or fewer financial resources
that can be spent in the near future to finance the State's programs. These funds are reported using
modified accrual accounting, which measures cash and all other financial assets that can readily be
converted to cash.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar information
presented for governmental activities in the government-wide financial statements. By doing so, readers
may better understand the long-term impact of the government’s near-term financing decisions. Both the
governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds
23
and the governmental activities. These reconciliations are presented on the page immediately following
each governmental fund financial statement.
Governmental funds include the General Fund, special revenue, debt service, and permanent funds. The
State has several governmental funds, of which three (3) are considered major individual funds. These
three are the General Fund, the Federal Fund, and the State Special Revenue Fund. Each of these major
funds is presented in a separate column in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures and changes in fund balance. The remaining governmental funds
are combined in a single aggregated column on the basic fund statements. Individual fund data for each of
these non-major governmental funds can be found in the other supplementary information section of this
report.
Proprietary funds – Services for which the State charges customers a fee are generally reported in
proprietary funds. The state maintains two different types of proprietary funds, enterprise funds and internal
service funds. Enterprise funds report activities that provide supplies and services to the general public.
Internal service funds report activities that provide supplies and services for the State's other programs and
activities. Like the government-wide statements, proprietary funds use the accrual basis of accounting.
Although the basis of accounting is the same for the government-wide and proprietary fund statements,
reconciliation between these statements is presented because of the allocation of internal service funds’
net income.
The State has four (4) major enterprise funds: The Bank of North Dakota, Housing Finance, University
System, and Workforce Safety and Insurance. These four funds are each presented in separate columns
on the basic proprietary fund financial statements. The remaining enterprise funds are combined in a single
total column on these statements. Individual fund data for each of the non-major enterprise funds can be
found in the other supplementary information section of this report.
The State’s internal service funds are reported as governmental activities on the government-wide
statements, because the services they provide predominantly benefit governmental activities. The State’s
four (4) internal service funds are reported on the basic proprietary fund financial statements in a single
combined column. Individual fund data for the internal service funds is provided in the form of combining
statements found in the other supplementary information section of this report.
Fiduciary funds - The State acts as a trustee, or fiduciary, for its employee pension plans. It is also
responsible for other assets that, because of a trust arrangement, can be used only for the trust
beneficiaries. The State's fiduciary activities are reported in separate Statements of Fiduciary Net Position
and Changes in Fiduciary Net Position. These funds, which include pension (and other employee benefit)
trust, investment trust, private-purpose trust, and agency funds, are reported using accrual accounting. The
government-wide statements exclude fiduciary fund activities and balances because the State cannot use
these assets to finance its operations.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and the fund financial statements. The notes to the financial statements can be found
immediately following component units’ financial statements.
Required Supplementary Information
The basic financial statements are followed by a section of required supplementary information. This section
includes a budgetary comparison schedule, which includes reconciliation between the statutory fund
balances for budgetary purposes and the fund balances for the General Fund, the Federal Fund and the
State Special Revenue Fund as presented in the governmental fund financial statements. In addition, the
required supplementary information includes up to ten years of information on the State’s pension and
Other Post Employment Benefit (OPEB) plans, including schedules on the employer proportionate share
of the net pension liability and net OPEB liability, changes in the net pension liability and OPEB liability, and
employer contributions.
24
Other Supplementary Information
Other supplementary information includes combining financial statements for non-major governmental,
non-major enterprise, internal service, and fiduciary funds. These funds are added together, by fund type,
and presented in single columns in the basic financial statements.
FINANCIAL ANALYSIS OF THE GOVERNMENT AS A WHOLE
As noted previously, net position may serve over time as a useful indicator of a government’s financial
position. The State’s combined net position (governmental and business-type activities) totaled $26.1 billion
at the end of fiscal year 2020. Net position increased $1.4 billion from the prior fiscal year.
State of North Dakota's Net Position
(Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2020 2019 2020 2019 2020 2019
Current and Other Assets $18,654,826 $16,972,671 $11,623,390 $11,346,654 $27,051,115 $25,434,033
Capital Assets 5,462,056 5,237,060 1,683,761 1,631,300 7,145,817 6,868,360
Total Assets 24,116,882 22,209,731 13,307,151 12,977,954 34,196,932 32,302,393
Deferred Outflows of
Resources 227,184 293,718 122,739 114,216 349,923 407,934
Long-Term Liabilities
Outstanding 576,130 798,562 3,783,572 4,245,686 4,359,702 5,044,248
Other Liabilities 1,966,512 1,029,509 4,979,632 4,687,353 3,719,043 2,831,570
Total Liabilities 2,542,642 1,828,071 8,763,204 8,933,039 8,078,745 7,875,818
Deferred Inflows of
Resources 252,367 63,215 96,983 35,002 349,350 98,217
Net Position
Net Investment in
Capital Assets 5,427,965 5,185,682 1,243,098 1,246,741 6,671,063 6,432,423
Restricted 6,543,042 6,639,786 1,374,339 972,887 7,917,381 7,612,673
Unrestricted 9,578,050 8,786,695 1,952,266 1,904,501 11,530,316 10,691,196
Total Net Position $21,549,057 $20,612,163 $4,569,703 $4,124,129 $26,118,760 $24,736,292
The largest component (44%) of the State’s net position is unrestricted net position. Unrestricted net
position may be used at the State’s discretion, but often have limitations on use based on State statutes.
Restricted net position makes up thirty percent (30%) of the state’s net position. Restricted net position
represents resources that are subject to external restrictions, constitutional provisions, or enabling
legislation on how they can be used.
Twenty-six percent (26%) of the State’s net position reflects its investment in capital assets such as land,
buildings, equipment, intangibles (software), and infrastructure (roads, bridges and other immovable
assets) less any related debt outstanding that was needed to acquire or construct the assets. The State
uses these capital assets to provide services to citizens; consequentially, these assets are not available for
future spending. Although the State’s investment in its capital assets is reported net of related debt, it should
be noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
The condensed financial information below was derived from the government-wide Statement of Activities
and reflects how the State’s net position changed during the fiscal year:
25
State of North Dakota's Changes in Net Position
(Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2020 2019 2020 2019 2020 2019
Revenues:
Program Revenues:
Charges for Services $347,155 $378,032 $2,214,200 $1,854,857 $2,561,355 $2,232,889
Operating Grants & Contributions 2,028,277 2,121,703 596,060 410,791 2,624,337 2,532,494
Capital Grants & Contributions 2 107 17,502 19,926 17,504 20,033
General Revenues:
Income Taxes 513,419 604,088 - - 513,419 604,088
Sales Taxes 1,364,665 1,435,130 - - 1,364,665 1,435,130
Oil, Gas and Coal Taxes 1,949,036 2,586,570 - - 1,949,036 2,586,570
Other Taxes 107,173 110,715 - - 107,173 110,715
Investment Earnings 333,528 360,264 - - 333,528 360,264
Tobacco Settlement 21,159 20,752 - - 21,159 20,752
Other 190,047 231,745 3,577 5,162 193,624 236,907
Total Revenues 6,854,461 7,849,106 2,831,339 2,290,736 9,685,800 10,139,842
Expenses
General Government 1,034,053 1,183,234 - - 1,034,053 1,183,234
Education 1,288,935 1,238,989 - - 1,288,935 1,238,989
Health and Human Services 2,077,950 1,947,263 - - 2,077,950 1,947,263
Regulatory 78,442 61,213 - - 78,442 61,213
Public Safety and Corrections 249,751 230,667 - - 249,751 230,667
Agriculture and Commerce 107,574 99,247 - - 107,574 99,247
Natural Resources 217,546 261,308 - - 217,546 261,308
Transportation 429,801 443,629 - - 429,801 443,629
Interest on Long Term Debt 1,691 1,952 - - 1,691 1,952
Bank of North Dakota - - 103,391 98,931 103,391 98,931
Housing Finance - - 56,537 52,715 56,537 52,715
Loan Programs - - 16,396 12,666 16,396 12,666
State Lottery - - 18,929 26,175 18,929 26,175
Unemployment Compensation - - 611,219 84,206 611,219 84,206
University System - - 1,227,858 1,198,989 1,227,858 1,198,989
Workforce Safety and Insurance - - 220,279 297,497 220,279 297,497
Other - - 616,265 594,491 616,265 594,491
Total Expenses $5,485,743 $5,467,502 $2,870,874 $2,365,670 $8,356,617 $7,833,172
Increase (decrease) in Net
Position Before Contributions,
Loss & Transfers 1,368,718 2,381,604 (39,535) (74,934) 1,329,183 2,306,670
Contributions to Permanent Fund
Principal 9,516 11,014 - - 9,516 11,014
Transfers (440,249) (290,718) 485,109 277,019 44,860 (13,699)
Change in Net Position 937,985 2,101,900 445,574 202,085 1,383,559 2,203,985
Net Position - Beginning 20,612,163 18,516,218 4,124,129 3,917,941 24,736,292 22,434,159
Prior Period Adjustment * (1,091) (5,955) - 4,103 (1,091) (1,852)
Net Position- Ending $21,549,057 $20,612,163 $4,569,703 $4,124,129 $26,118,760 $24,736,292
* More detailed information regarding the prior period adjustments can be found in Note 2.
26
Governmental Activities
Governmental Activities increased the State’s net position by $938 million. Revenues decreased 12.7%,
with the largest dollar decrease in the State’s revenues for fiscal year 2020 coming from oil, gas, and coal,
taxes, a decrease of $637.5 million. The decrease in individual and corporate income taxes is due to the
change in the due date for the 2019 tax returns from April 15 to July 15, 2020 as a federal and state
response to the global pandemic. Oil and Gas production tax and Oil Extraction tax decreases due to very
weak oil prices and production declines associated with the nationwide recession caused by the global
pandemic.
Expenses for governmental activities remained relatively consistent.
The following chart depicts revenues of the governmental activities for the fiscal year:
Revenues - Governmental Activities
Fiscal Year Ending June 30, 2020
Capital Grants &
Contributions
Operating Grants &
0.00%
Contributions
29.59% Unres. Investment
Earnings
4.87%
Charges for Services
5.06%
Other General Taxes
2.77% 57.40%
Tobacco Settlement
0.31%
The chart on the following page depicts expenses of the governmental activities for the fiscal year:
27
Expenditures - Governmental Activities
Fiscal Year Ending June 30, 2020
Natural Resources
3.97% Education
23.50%
Interest on Long Term Agriculture and
Debt Commerce
0.03% 1.96%
General Government
18.85%
Health and Human
Services
37.88% Transportation
7.83%
Regulatory
1.43% Public Safety and
Corrections
4.55%
Business-type Activities
Net position of the business-type activities increased by $446.7 million during the fiscal year.
Workforce Safety and Insurance’s (WSI) net position increased $135.6 million. Fiscal year 2020 shows
decreases in earned premiums, incurred losses, and the number of filed claims. There was a slight increase
in the number of policy holders. Policyholder count increased by 107 policies in fiscal year 2020. WSI’s
financial position remains stable. Earned premium net of discounts and reinsurance totaled $221 million,
$238 million, and $232 million for fiscal years 2020, 2019, and 2018, respectively. Total claims filed for
fiscal year 2020 totaled 18,813. This is a decrease of 1,100 from the previous fiscal year 2019 total of
19,913. A dividend credit of 50% was declared in fiscal year 2020, 2019 and 2018. Net earned premium
from fiscal year 2020 of $221 million is slightly down from the fiscal year 2019 total of $238 million. The
strong investment return in the past three years has contributed to the positive change in net position.
The Bank of North Dakota net position increased $96.2 million. The loan portfolio decreased by $55,000 to
$4.4 billion at December 31, 2019. Interest-bearing deposits totaled $4.5 billion at December 31, 2019
compared to $4.2 billion at December 31, 2018. This fluctuation is due to state deposits and the economic
status of the state. The Bank has a tier one capital leverage ratio of 13.60% as of December 31, 2019. The
leverage ratio is a measure of strength. Well capitalized per federal regulations requires this percentage to
be a minimum of 5%.
The University System’s net position decreased $11.6 million. The University system saw a decrease in
revenues and an increase in expenditures which attributed to their decrease in net position. Grants and
contracts (operating revenues) decreased mainly due to reduced National Science Foundation grants at
NDSU and federal awards at UND. The decrease in sales and services of educational department and
auxiliary enterprises revenues are attributed to Covid-19 related closures of the institutions in the third and
fourth quarters of FY20. The largest increases of operating expenses for the University system was
Scholarships and fellowships, CARES act aid to students, and cost of sales and services. Scholarships and
fellowships increased primarily due to the implementation of a new waiver for a freshman academic award.
CARES act aid was new for FY20 and was used to provide monetary aid to students impacted by the Covid-
19 pandemic. Cost of sales and services increased primarily as a result of timing of internal billings to other
operating departments at UND.
28
Housing Finance net position increase of $15.5 million as a result of the year’s program operations and
financing activities. Operating revenues in FY20 were up as a result of higher mortgage interest income
due to a larger mortgage loan receivable balance. Also, investment interest rates were slightly higher due
to debt service reserve funds being invested in mortgage backed securities which have typically earned
higher rates of interest than currently available GICs and Money Market accounts. Operating expenses
were up from prior year operating expenses due to higher interest expenses with regards to a larger bonds
payable balance. Also, administrative and operating expenses were lower than the prior year.
FINANCIAL ANALYSIS OF THE STATE’S FUNDS
Governmental Funds
As the State completed the year, its governmental funds reported combined fund balances of $16.5 billion,
an increase of $760 million from the prior fiscal year. Of the $16.5 billion in net position, $109 million is non-
spendable, $6.4 billion is restricted, $1.9 billion is committed, $420 million is assigned, and $7.7 billion is
unassigned. These fund balance categories are a result of GASB Statement 54. Note 1U provides
definitions for these categories. The following analysis of funds provides the explanation for the overall
change in net position for governmental funds.
The General Fund is the chief operating fund of the State. At the end of current fiscal year, unassigned fund
balance of the General Fund was $7.7 billion, non-spendable was $6.2 million, and $1.1 billion was
committed for expenditure by various governmental functions.
Total General Fund balance increased during the fiscal year by $1.1 billion. Revenues increased
approximately 4.7%, due to an increase in oil, gas, and coal taxes of $313 million. This increase was due
to the way Oil, Gas, and Coal taxes are distributed within the state. Revenue for oil, gas, and coal taxes
are distributed first to the general fund and then once the max amount is reached the revenues will then be
distributed to the next fund. The reason we saw an increase from FY19 was because in FY19 these general
fund distributions would have already been met in FY18 so there would not have been as many revenues
in the general fund for FY19. As there was an increase in the general fund revenues, revenues for the
overall state had decreased and was previously explained with the increase in net position for governmental
activities.
General fund expenditures increased by $161.1 million or 8.6% with the largest increases in Education and
Health and Human Services. However, total expenditures for the Governmental funds remained relatively
consistent. The increase in Education primarily came from an increase in state student aid from the general
fund in FY20. In the previous biennium these expenses would have been paid for with special funds. The
increase in Health and Human Services was also due to reallocating more expenses to the general fund in
the first year of the biennium.
The State Special Revenue ending fund balance decreased by $380 million resulting in $7.7 billion fund
balance. Revenues decreased by 41.6% in the state special revenue fund primarily due to a decrease in
oil, gas, and coal taxes of $949.8 million due to weak oil prices and production decline as previously
discussed. This decrease was also due to the increase in the general fund oil, gas, and coal revenues in
FY20 as oil gas and coal taxes are first allocated to the general fund as previously explained. Special fund
expenditures decreased by 13.7% primarily due to a decrease in Education and Health and Human
Services spending. Decreases to the special funds was previously discussed under the general fund
expenditures.
The June 30 Federal Fund balance of $11.9 million consists primarily of non-spendable items such as
prepaids and inventory. Revenues increased by $204.8 million and expenditures increased by $186.1
million primarily due to the increase in federal funding for the global pandemic. The federal fund balance
increased by $1.2 million due to additional funding for the state to combat the global pandemic.
29
Proprietary Funds
The State’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. The increases in the net position of the proprietary funds are discussed
under “Business-type Activities” above.
General Fund Budgetary Highlights:
The general fund budgetary revenues and other financing sources were $8.2 million or 5.1% higher than
the final budget, primarily because of actual sales tax and department collections were more than the final
budgeted amount. The State has a biennial appropriated budget. The fiscal year ending June 30, 2020,
was the first year of the 2019-21 budget cycle. The original budget increased $128.6 million. The increases
to the beginning appropriated budget are from authorized carryover of general fund appropriation authority
and legislative changes of which the larger ones are noted below.
Several state agencies were authorized by appropriation laws to carryover a portion or all of their general
fund appropriation for various purposes, including the University System, $55.1 million, the Department of
Human Services, $5.8 million, Secretary of State, $1.3 million, the Department of Commerce, $33.1 million,
the Parks and Recreation department, $2.1 million, the Department of Transportation, $13 million,
Legislative Council and Assembly, $4.7 million, and Office of Management & Budget, $3.6 million.
Of the $6.4 million in capital construction carryover dollars, $5.5 million was for the Department of Human
Services and $804 thousand for the Department of Transportation.
There were no expenditures in excess of general fund authority.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets: At the end of the fiscal year 2020, the State had invested $6.7 billion, net of accumulated
depreciation, in a broad range of capital assets. Depreciation charges for this fiscal year totaled $252
million.
(Net of Depreciation, Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2020 2019* 2020 2019 2020 2019*
Land and Land Improvements $163,127 $161,050 $25,552 $24,099 $188,679 $185,149
Building & Building Improvements 421,917 411,708 1,143,267 1,139,160 1,565,184 1,550,868
Equipment 174,539 168,030 165,976 172,127 340,515 340,157
Intangibles
Software 229,560 244,549 754 1,982 230,314 246,531
Other 9,676 9,684 10,031 8,441 19,707 18,125
Infrastructure 2,971,697 2,588,639 118,047 118,542 3,089,744 2,707,181
Construction in Progress 1,491,541 1,652,309 220,134 166,949 1,711,675 1,819,258
Total $5,462,057 $5,235,969 $1,683,761 $1,631,300 $7,145,818 $6,867,269
* Beginning capital asset balances were adjusted for certain reclassifications.
The total increase in the State’s investments in capital assets for the current fiscal year was 4.1% in terms
of net book value. However, actual expenditures to purchase or construct capital assets were approximately
$1.1 billion for the year. A major portion of this amount was used to construct or reconstruct assets for
highway construction. More detailed information on the State’s capital assets can be found in Note 3H to
the financial statements.
30
Long-term Debt: Article X, Section 13 of the Constitution of North Dakota provides that the state may issue
or guarantee the payment of bonds provided that all bonds in excess of $2 million are: secured by first
mortgage upon property and no further indebtedness may be incurred by the state unless evidenced by a
bond issue; authorized by law, for a certain purpose; provisioned to pay the interest semiannually, and pay
the principal within 30 years. The law authorized the bond issue must specifically appropriate the provisions
to the payment of the principal and interest of the bond. The State has no general obligation bonds
outstanding at June 30, 2020.
The State does have a number of revenue bonds outstanding at June 30, 2020. Current state statutes
empower certain state agencies and the Building Authority, a component unit of the State, to issue bonds
as part of their activities. This debt is not backed by the full faith and credit of the State of North Dakota.
The principal and interest on revenue bonds issued by state agencies is payable from designated revenue
sources. The Building Authority’s bonds generate revenue to finance the construction and improvements
of State buildings. Revenues derived from leases on the buildings fund the debt service requirements.
The Bank of North Dakota has advances from the Federal Home Loan Bank in the amounts of $631 million.
The advances have a fixed rate of interest, ranging from 1.61 percent to 5.56 percent.
More detailed information regarding the State’s long-term obligations is presented in Note 3L to the financial
statements.
State of North Dakota's Outstanding Debt
(Expressed in Thousands)
Governmental Business-Type Total Primary
Activities Activities Government
2020 2019 2020 2019 2020 2019
Revenue Bonds $19,730 $29,950 $1,666,599 $1,525,285 $1,686,329 $1,555,235
Certificate of
Participation - - 104,120 96,843 104,120 96,843
Notes Payable 14,817 21,897 648,266 1,120,787 663,083 1,142,684
Total $34,547 $51,847 $2,418,985 $2,742,915 $2,453,532 $2,794,762
The State’s total debt decreased approximately 12.2% during the current fiscal year.
ECONOMIC CONDITION AND OUTLOOK
Moody’s Analytics recently completed an analysis of the North Dakota economy for its Précis U.S. State
October 2020 publication. The report depicts an economy in recovery, coming out of the COVID-19
recession, but at a slow pace mostly due to the effects the massive drop in oil prices had on employment.
North Dakota’s outlook is linked tightly to two major industries, energy and agriculture. The oil industry will
prove one of the worst economic casualties from the pandemic, which led to the plummet in price and the
decrease for demand. Oil production per rig has risen slightly by 3 percent per rig in the last year. The
most recent North Dakota average price per barrel of oil was at $33.00, which is below the estimated price
of $48.00 used for budgeting purposes. On the agriculture side, the demand for crops remained intact
throughout the pandemic, but the closure of the U.S./Canada border continues to expound the decline seen
in exports and commodity prices are expected to remain low.
North Dakota’s job growth has taken a hit because of the pandemic. At the end of September the job count
was 7.3% lower than it was in January. Unemployment in North Dakota is at 5.2%, which is more than
double what it was for the same time frame in 2019. The positive is that the tight labor market could be an
attractive draw to job seekers from other states.
31
Median household income and per capita income for North Dakota are both ahead of the national average.
For 2020, median household income in North Dakota was $70,031 compared to $68,703 for the U.S. Per
capita income for 2019 was $57,232 for North Dakota, while $56,490 for the U.S.
CONTACTING THE STATE’S OFFICE OF FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with
a general overview of the State’s finances and to demonstrate the State’s accountability for the money it
receives. Questions about this report or additional financial information should be addressed to the State
of North Dakota, Office of Management and Budget, 600 E. Boulevard, Dept. 110, Bismarck, ND 58505.
32
State of North Dakota
Basic Financial Statements
33
STATE OF NORTH DAKOTA
Statement of Net Position
June 30, 2020
Primary Government Component
Governmental Business-Type Units
Activities Activities Total (GASB Based)
ASSETS
Cash and Cash Equivalents $ 95,005,764 $ 672,801,057 $ 767,806,821 $ 21,198,438
Investments 13,444,761,427 4,200,024,737 17,644,786,164 -
Accounts Receivable - Net 128,572,020 147,843,778 276,415,798 166,142
Taxes Receivable - Net 475,616,473 - 475,616,473 -
Interest Receivable - Net 47,537,684 70,688,451 118,226,135 140,860
Intergovernmental Receivable - Net 297,613,719 33,720,267 331,333,986 -
Internal Receivable 3,908,767,620 - 681,667,023 -
Due from Component Units - 31,077,783 31,077,783 -
Due from Primary Government - - - 60,000
Prepaid Items 10,927,427 4,663,895 15,591,322 -
Inventory 25,451,386 36,517,254 61,968,640 -
Loans and Notes Receivable - Net 185,615,938 4,827,952,831 5,013,568,769 11,569,573
Pension Assets 31,006,306 - 31,006,306 -
Other Assets - 40,675,586 40,675,586 -
Restricted Assets:
Cash and Cash Equivalents 3,949,863 217,316,000 221,265,863 83,592,057
Investments - 48,739,124 48,739,124 978,234,000
Interest Receivable - Net - 5,143,000 5,143,000 5,570,000
Loans and Notes Receivable - Net - 1,286,226,000 1,286,226,000 -
Capital Assets:
Nondepreciable 1,654,668,491 245,686,004 1,900,354,495 1,115,389
Depreciable, Net 3,807,388,097 1,438,075,293 5,245,463,390 1,360
Total Assets 24,116,882,215 13,307,151,060 34,196,932,678 1,101,647,819
DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Bond Refunding 1,764,000 3,865,270 5,629,270 3,116,000
Decrease in Fair Value of Hedging Derivatives - 735,025 735,025 -
Financial Derivative Instrument - 16,132,000 16,132,000 -
Unrealized Loss on Interest Rate Swap - 24,839,000 24,839,000 -
Derived from Pensions 216,147,924 73,962,614 290,110,538 83,000
Derived from OPEB 9,271,857 3,205,523 12,477,380 -
Total Deferred Outflows of Resources 227,183,781 122,739,432 349,923,213 3,199,000
* An internal receivables balance remains in the Total column because certain Business-Type Activities have different
fiscal year ends than the Governmental Activities. As internal balances are reported separately as internal receivables
and internal payables, those lines, as well as the total assets and total liabilities, do not crossfoot.
The Accompanying Notes are an Integral Part of the Financial Statements
34
STATE OF NORTH DAKOTA
Statement of Net Position
June 30, 2020
Primary Government Component
Governmental Business-Type Units
Activities Activities Total (GASB Based)
LIABILITIES
Accounts Payable 337,234,576 67,536,949 404,771,525 655,780
Accrued Payroll 60,831,029 42,415,521 103,246,550 -
Securities Lending Collateral 244,750,650 6,572,871 251,323,521 -
Interest Payable 1,311,019 23,939,072 25,250,091 4,537,000
Intergovernmental Payable 132,405,765 11,201,802 143,607,567 -
Tax Refunds Payable 145,372,981 - 145,372,981 -
Internal Payable - 3,227,100,597 - -
Due to Component Units - 33,723,482 33,723,482 -
Due to Primary Government - - - 102,855
Contract Retainage Payable 17,223,179 3,048,764 20,271,943 -
Federal Funds Purchased - 365,335,000 365,335,000 -
Other Deposits - 976,110,478 976,110,478 -
Amounts Held In Custody for Others - 24,981,398 24,981,398 -
Unearned Revenue 1,027,382,988 128,825,883 1,156,208,871 42,066
Financial Derivative Instrument - 16,867,025 16,867,025 -
Other Liabilities - 51,973,184 51,973,184 -
Long-Term Liabilities
Due within one year 12,646,480 737,727,178 750,373,658 25,669,591
Due in more than one year 84,118,600 2,880,878,099 2,964,996,699 494,831,749
Net Pension Liability 448,957,000 154,931,269 603,888,269 191,000
Net OPEB Liability 30,408,110 10,035,644 40,443,754 -
Total Liabilities 2,542,642,377 8,763,204,216 8,078,745,996 526,030,041
DEFERRED INFLOWS OF RESOURCES
Grant Received Prior to Time Requirements - 174,808 174,808 -
Unrealized Gain on Interest Rate Swap - 8,381,000 8,381,000 -
Derived from Pensions 249,838,840 87,646,067 337,484,907 103,000
Derived from OPEB 2,528,058 781,316 3,309,374 -
Total Deferred Inflows of Resources 252,366,898 96,983,191 349,350,089 103,000
NET POSITION
Net Investment in Capital Assets 5,427,964,743 1,243,098,375 6,671,063,118 1,360
Restricted for:
General Government 5,851,361 - 5,851,361 -
Education 5,276,169,697 - 5,276,169,697 -
Health and Human Services 20,141,144 - 20,141,144 -
Regulatory Purposes 85,030,225 - 85,030,225 -
Public Safety & Corrections 9,450,751 - 9,450,751 -
Agriculture and Commerce 63,178,488 - 63,178,488 -
Cultural and Natural Resources 477,274,736 - 477,274,736 -
Transportation 484,944,367 - 484,944,367 -
Capital Projects - 1,340,114 1,340,114 -
Debt Service 787,977 206,832,514 207,620,491 114,641,000
Loan Purposes - 36,732,214 36,732,214 428,761,000
Pledged Assets - 829,880,000 829,880,000 -
Unemployment Compensation - 262,917,778 262,917,778 -
Pension Benefits 31,006,306 - 31,006,306 -
Permanent Fund and University System - Nonexpendable 77,298,335 17,387,728 94,686,063 2,155,492
University System - Expendable - 17,310,462 17,310,462 -
Other 11,908,521 1,937,845 13,846,366 -
Unrestricted 9,578,050,070 1,952,266,055 11,530,316,125 33,154,926
Total Net Position $ 21,549,056,721 $ 4,569,703,085 $ 26,118,759,806 $ 578,713,778
The Accompanying Notes are an Integral Part of the Financial Statements
35
STATE OF NORTH DAKOTA
Statement of Activities
For the Fiscal Year Ended June 30, 2020
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary Government:
Governmental Activities:
General Government $ 1,034,052,808 $ 31,944,485 $ 10,297,523 $ -
Education 1,288,935,269 10,566,897 279,997,311 -
Health and Human Services 2,077,950,367 47,748,086 1,247,736,146 -
Regulatory 78,441,824 37,130,755 14,506,117 1,939
Public Safety and Corrections 249,751,212 20,811,638 73,411,717 -
Agriculture and Commerce 107,574,065 38,228,838 25,113,442 -
Natural Resources 217,545,757 44,662,134 39,733,823 -
Transportation 429,801,053 116,062,224 337,481,474 -
Interest on Long Term Debt 1,691,314 - - -
Total Governmental Activities 5,485,743,669 347,155,057 2,028,277,553 1,939
Business-Type Activities:
Bank of North Dakota 103,391,326 279,302,000 - -
Housing Finance 56,536,682 58,096,789 13,945,000 -
Loan Programs 16,395,752 17,114,318 363,934 -
State Lottery 18,929,003 24,505,932 10,770 -
Unemployment Compensation 611,219,223 452,421,028 197,406,210 -
University System 1,227,857,663 528,517,702 256,301,231 17,501,749
Workforce Safety & Insurance 220,279,394 230,442,756 125,237,317 -
Other 616,265,019 623,799,925 2,795,633 -
Total Business-Type Activities 2,870,874,062 2,214,200,450 596,060,095 17,501,749
Total Primary Government $ 8,356,617,731 $ 2,561,355,507 $ 2,624,337,648 $ 17,503,688
Component Units (GASB Based): $ 37,614,001 $ 6,792,716 $ 46,030,733 $ -
General Revenues:
Taxes:
Individual and Corporate Income Taxes
Sales and Use Taxes
Oil, Gas and Coal Taxes
Business and Other Taxes
Unrestricted Investment Earnings
Tobacco Settlement
Miscellaneous
Payment from State of North Dakota
Contributions to Perm Fund Principal
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position, Beginning of Year, as Restated
Net Position, Ending
The Accompanying Notes are an Integral Part of the Financial Statements
36
Net (Expense) Revenue and Change in Net Position
Primary Government Component
Governmental Business-Type Units
Activities Activities Total (GASB Based)
$ (991,810,800) $ (991,810,800)
(998,371,061) (998,371,061)
(782,466,135) (782,466,135)
(26,803,013) (26,803,013)
(155,527,857) (155,527,857)
(44,231,785) (44,231,785)
(133,149,800) (133,149,800)
23,742,645 23,742,645
(1,691,314) (1,691,314)
(3,110,309,120) (3,110,309,120)
175,910,674 175,910,674
15,505,107 15,505,107
1,082,500 1,082,500
5,587,699 5,587,699
38,608,015 38,608,015
(425,536,981) (425,536,981)
135,400,679 135,400,679
10,330,539 10,330,539
- (43,111,768) (43,111,768)
(3,110,309,120) (43,111,768) (3,153,420,888)
$ 15,209,448
513,419,336 - 513,419,336 -
1,364,664,641 - 1,364,664,641 -
1,949,036,077 - 1,949,036,077 -
107,173,491 - 107,173,491 -
333,528,092 - 333,528,092 -
21,159,397 - 21,159,397 -
190,047,481 3,576,763 193,624,244 -
- - - 15,000,000
9,515,851 - 9,515,851 -
(440,249,767) 485,109,074 44,859,307 -
4,048,294,599 488,685,837 4,536,980,436 15,000,000
937,985,479 445,574,069 1,383,559,548 30,209,448
20,611,071,242 4,124,129,016 24,735,200,258 548,504,330
$ 21,549,056,721 $ 4,569,703,085 $ 26,118,759,806 $ 578,713,778
The Accompanying Notes are an Integral Part of the Financial Statements
37
STATE OF NORTH DAKOTA
Statement of Net Assets
Component Units
FASB Basis
June 30, 2020
Major Nonmajor State Historical
University System University System Society
Foundation Foundation Foundation
ASSETS
Current Assets:
Cash and Cash Equivalents $ 98,895,593 $ 8,661,416 $ 735,833
Receivable from Primary Institution 3,632,031 70,823 -
Investments 27,093,981 23,570,626 -
Accounts Receivable - Net 5,693,026 649,129 -
Notes receivable 2,800,000 50,153 -
Unconditional Promises to Give - Net 22,323,206 841,947 86,601
Net investment in Direct Financing Leases 1,216,210 - -
Inventory 1,509,420 - -
Other Assets 1,583,369 75,692 -
Total Current Assets 164,746,836 33,919,786 822,434
Noncurrent Assets:
Restricted Cash and Cash Equivalents 8,202,625 676,488 -
Investments:
Investments, Net of Current Portion 537,319,052 40,613,348 474,870
Investments, Restricted 3,338,119 - -
Investments Held In Trust 24,342,250 3,397,723 -
Beneficial Interest In Trust 16,632,251 - -
Charitable Gift Annuity Investments 5,770,428 - -
Charitable Remainder Trust Account Investments 17,679,102 - -
Real Estate and Equipment Held for Investment - Net 18,318,303 - -
Other Long-Term Investments 22,549,851 225,641 -
Contracts for Deed & Notes Receivable, Net of Current Portion 711,940 - -
Unconditional Promises to Give - Net - - 93,719
Long-Term Pledges Receivable 67,959,703 4,015,159 -
Other Receivables 36,198 - -
Receivable from Primary Institution 29,433,834 47,458 -
Net investment in Direct Financing Leases, Net of Current Portion 11,332,752 - -
Other noncurrent assets 2,190,540 2,570,019 159,169
Notes Receivable - Net 8,684,000 - -
Capital Assets - Net 143,591,569 22,518,676 1,764
Total Noncurrent Assets 918,092,517 74,064,512 729,522
Total Assets 1,082,839,353 107,984,298 1,551,956
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities 3,240,306 220,666 7,295
Compensated Absences Payable - - 14,371
Payable to Primary Institution 4,063,398 364,019 -
Accrued Payroll 1,350,817 3,235 6,105
Gift Annuities & Life Income Agreements 2,630,123 58,088 -
Unearned Revenue 13,031,609 152,500 40,016
Other Liabilities 2,100,269 2,334 -
Current Potion of Long-Term Liabilities 7,151,067 1,807,530 -
Total Current Liabilities 33,567,589 2,608,372 67,787
Noncurrent Liabilities:
Deposits 18,634,032 682,852 -
Investments Held on Behalf of Institutions - 3,397,723 -
Gift Annuities & Life Income Agreements, Net of Current Portion 15,838,279 - -
Obligations Under Split-Interest Agreement 6,314,921 - -
Loan Payable - - 55,825
Other Liabilities 497,531 - 136,668
Long-Term Liabilities 56,481,306 13,943,252 -
Total Noncurrent Liabilities 97,766,069 18,023,827 192,493
Total Liabilities 131,333,658 20,632,199 260,280
Net Assets
With Donor Restriction 228,331,461 6,088,873 598,544
Without Donor Restriction 723,174,234 81,263,226 693,132
Total Net Asset 951,505,695 87,352,099 1,291,676
Total Liabilities and Net Assets $ 1,082,839,353 $ 107,984,298 $ 1,551,956
The Accompanying Notes are an Integral Part of the Financial Statements 38
STATE OF NORTH DAKOTA
Statement of Revenues, Expenses and Changes in Fund Net Assets
Component Units
FASB Basis
For the Fiscal Year Ended June 30, 2020
Major Nonmajor State Historical
University System University System Society
Foundation Foundation Foundation
Support and Revenue
Gifts and Contributions $ 131,964,588 $ 4,789,250 $ 569,745
Investment Income 14,874,731 4,094,810 17,647
Grant Revenue - 565,281 3,000
Net Realized and Unrealized Gains (Losses) on Investment Securities 21,407,185 229,568 (11,828)
Program and Event Income 50,502,816 9,764,053 216,961
Other Income 5,874,718 2,454,562 21,804
Total Support and Revenue 224,624,038 21,897,524 817,329
EXPENSES
Program Services $ 55,147,203 $ 6,530,559 $ 242,525
Supporting Services 54,872,901 11,543,738 349,404
Fund Raising Expense 7,200,113 308,762 12,511
Total Expenses 117,220,217 18,383,059 604,440
Changes in Net Assets $ 107,403,821 $ 3,514,465 $ 212,889
Total Net Assets - Beginning of Year , as Restated $ 844,101,874 $ 83,837,634 $ 1,078,787
Total Net Assets - End of Year $ 951,505,695 $ 87,352,099 $ 1,291,676
The Accompanying Notes are an Integral Part of the Financial Statements
39
STATE OF NORTH DAKOTA
Balance Sheet
Governmental Funds
June 30, 2020
Special Revenue Nonmajor
Governmental
General Federal State Funds Total
ASSETS
Cash Deposits at the Bank of ND $ 846,820,271 $ 1,061,629,395 $ 1,703,392,900 $ 519,276 $ 3,612,361,842
Cash and Cash Equivalents 82,771,999 143,661 11,585,231 124,728 94,625,619
Restricted Cash and Cash Equivalents 396 3,949,467 - - 3,949,863
Investments at the Bank of ND - - 370,542,861 813,000 371,355,861
Investments 7,664,627,711 - 5,743,243,624 27,880,534 13,435,751,869
Accounts Receivable - Net 16,785,809 30,615,898 80,897,446 9 128,299,162
Taxes Receivable - Net 395,233,860 - 80,251,668 108,435 475,593,963
Interest Receivable - Net 29,511,672 - 17,886,690 83,141 47,481,503
Intergovernmental Receivable - Net 754,834 285,351,295 11,084,607 - 297,190,736
Due from Other Funds 106,624,956 29,655,189 21,663,381 22,596 157,966,122
Prepaid Items 3,074,488 1,704,705 2,026,441 - 6,805,634
Inventory 3,072,480 11,746,896 10,484,014 - 25,303,390
Loans and Notes Receivable - Net 47,884 233,524 135,700,874 49,633,656 185,615,938
Total Assets 9,149,326,360 1,425,030,030 8,188,759,737 79,185,375 18,842,301,502
DEFERRED OUTFLOWS OF RESOURCES
Total Deferred Outflows of Resources - - - - -
Total Assets and Deferred Outflows of
Resources $ 9,149,326,360 $ 1,425,030,030 $ 8,188,759,737 $ 79,185,375 $ 18,842,301,502
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable 77,913,242 171,009,681 85,329,950 35,772 334,288,645
Accrued Payroll 36,106,021 8,010,779 13,355,856 89 57,472,745
Securities Lending Collateral 35,033,119 - 209,001,449 698,744 244,733,312
Interest Payable 152,036 - 926,970 - 1,079,006
Intergovernmental Payable 980,186 29,301,817 102,123,762 - 132,405,765
Tax Refunds Payable 140,767,800 - 4,605,181 - 145,372,981
Due to Other Funds 32,084,797 166,253,373 67,309,667 3,435,081 269,082,918
Contract Retainage Payable 412,430 7,278,479 9,532,270 - 17,223,179
Unearned Revenues - 1,027,213,442 124,356 - 1,027,337,798
Total Liabilities 323,449,631 1,409,067,571 492,309,461 4,169,686 2,228,996,349
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 97,098,515 4,053,938 13,372,766 - 114,525,219
Unpaid Penalty and Interest - - 624,074 - 624,074
Total Deferred Inflows of Resources 97,098,515 4,053,938 13,996,840 - 115,149,293
Fund Balances:
Nonspendable
Inventory 3,072,480 11,746,896 10,484,014 - 25,303,390
Long - Term Receivables 47,882 - - - 47,882
Prepaid Expenditures 3,074,488 1,704,705 2,026,441 - 6,805,634
Permanent Trust Fund - - - 77,298,335 77,298,335
Restricted 396 - 6,410,260,955 703,000 6,410,964,351
Committed 1,066,688,590 - 839,955,053 292,354 1,906,935,997
Assigned - - 419,726,973 - 419,726,973
Unassigned 7,655,894,378 (1,543,080) - (3,278,000) 7,651,073,298
Total Fund Balances 8,728,778,214 11,908,521 7,682,453,436 75,015,689 16,498,155,860
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance $ 9,149,326,360 $ 1,425,030,030 $ 8,188,759,737 $ 79,185,375 $ 18,842,301,502
40
The Accompanying Notes are an Integral Part of the Financial Statements
STATE OF NORTH DAKOTA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2020
Total Fund Balances-Governmental Funds $ 16,498,155,860
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore
are not reported as assets in governmental funds. The cost of assets is $9,106,776,885
and the accumulated depreciation is $5,369,262,003. 5,369,262,003
Other assets not available in the current period and therefore are not reported in the
governmental funds:
Net Pension Asset 31,006,306
Deferred outflows of resources are not reported in the governmental funds:
Loss on bond refunding 1,764,000
Related to OPEB 8,724,462
Related to pensions 204,202,961
Total Deferred Outflows 214,691,423
Some of the state's revenues will be collected after year-end, but are not available soon
enough to pay for the current period's expenditures, and therefore are unavailable in the funds. 114,480,029
Prepaid items are paid from current available financial resources in the funds, but are capitalized
in the statement of net position. -
Internal service funds are used to charge the costs of certain activities to individual funds.
The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of
the internal service funds are included in governmental activities in the statement of net position. 96,308,421
Voluntary termination benefits for employees are accrued in the statement of net position. -
Deferred inflows of resources are not reported in the governmental funds:
Unpaid penalty and interest 624,074
Related to OPEB (2,386,736)
Related to pensions (235,782,684) (237,545,346)
Long-term liabilities and related accrued interest are not due and payable in the current period
and therefore are not reported as liabilities in the funds. Those liabilities consist of:
Bonds Payable (19,730,000)
Notes Payable (14,817,054)
Accrued Interest on Long-Term Liabilities (226,283)
Compensated Absences (48,355,608)
Intergovernmental Payable -
Capital Leases (754,014)
Other Postemployment Benefit Obligation (28,773,636)
Net Pension Liability (423,656,679)
Claims and Judgments (988,701)
Total Long-Term Liabilities (537,301,975)
Net Position of Governmental Activities $ 21,549,056,721
The Accompanying Notes are an Integral Part of the Financial Statements
41
STATE OF NORTH DAKOTA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2020
Special Revenue Nonmajor
Governmental
General Federal State Funds Total
REVENUES
Individual and Corporate Income Taxes $ 512,136,793 $ - $ 2,315,773 $ 21,564 $ 514,474,130
Sales and Use Taxes 1,086,925,545 509 296,024,221 - 1,382,950,275
Oil, Gas, and Coal Taxes 1,088,938,940 - 858,927,685 1,547,095 1,949,413,720
Business and Other Taxes 63,503,629 - 44,401,252 - 107,904,881
Licenses, Permits and Fees 9,211,701 11,166 196,646,107 12,225 205,881,199
Intergovernmental 1,045,932 1,906,682,078 23,390,758 4,299,811 1,935,418,579
Sales and Services 2,368,530 2,330,463 58,942,056 6,780 63,647,829
Royalties and Rents 25,015,395 8,958 325,278,959 - 350,303,312
Fines and Forfeits 3,876,152 - 24,864,432 - 28,740,584
Interest and Investment Income (Loss) 314,687,504 356,201 (48,554,201) 1,333,097 267,822,601
Tobacco Settlement - - 21,159,397 - 21,159,397
Commodity Assessments - - 23,180,351 - 23,180,351
Miscellaneous 2,560,862 2,399,615 26,987,546 62,350 32,010,373
Total Revenues 3,110,270,983 1,911,788,990 1,853,564,336 7,282,922 6,882,907,231
EXPENDITURES
Current:
General Government 163,257,932 6,909,223 51,341,711 92,939 221,601,805
Education 827,123,764 183,650,225 275,791,586 - 1,286,565,575
Health and Human Services 793,264,051 1,177,119,396 66,416,412 180,009 2,036,979,868
Regulatory 22,561,097 13,906,726 30,157,124 12,000 66,636,947
Public Safety and Corrections 162,223,308 55,534,933 10,724,588 - 228,482,829
Agriculture and Commerce 24,578,826 22,563,146 59,119,543 - 106,261,515
Natural Resources 16,052,286 20,351,739 160,536,050 - 196,940,075
Transportation 13,262,292 160,060,907 157,003,138 - 330,326,337
Intergovernmental - Revenue Sharing 3,892,217 - 802,042,365 - 805,934,582
Capital Outlay 14,695,700 216,757,904 148,993,746 3,266,000 383,713,350
Debt Service:
Principal 887,832 4,566,484 5,652,057 9,460,000 20,566,373
Interest and Other Charges 376,097 44,804 264,565 1,114,650 1,800,116
Total Expenditures 2,042,175,402 1,861,465,487 1,768,042,885 14,125,598 5,685,809,372
Revenues over (under) Expenditures 1,068,095,581 50,323,503 85,521,451 (6,842,676) 1,197,097,859
OTHER FINANCING SOURCES (USES)
Bonds and Notes Issued 2,825,172 - 518,928 - 3,344,100
Capital Lease Acquisitions 65,787 80,040 - - 145,827
Sale of Capital Assets - 197,000 72,769 - 269,769
Transfers In 484,023,503 149,969 72,760,005 6,209,594 563,143,071
Transfers Out (412,727,251) (49,531,616) (539,140,017) (2,166,756) (1,003,565,640)
Total Other Financing Sources (Uses) 74,187,211 (49,104,607) (465,788,315) 4,042,838 (436,662,873)
Net Change in Fund Balances 1,142,282,792 1,218,896 (380,266,864) (2,799,838) 760,434,986
Fund Balances - Beginning of Year 7,586,495,422 10,689,625 8,062,720,300 77,815,527 15,737,720,874
Fund Balances - End of Year $ 8,728,778,214 $ 11,908,521 $ 7,682,453,436 $ 75,015,689 $ 16,498,155,860
The Accompanying Notes are an Integral Part of the Financial Statements
42
STATE OF NORTH DAKOTA
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2020
Net Change in Fund Balances-Total Governmental Funds $ 760,434,986
Amounts reported for governmental activities in the statement of activities
are different because:
Capital outlays are reported as expenditures in governmental funds. However, in the
statement of activities, the cost of those assets is allocated over their estimated
useful lives as depreciation expense. In the current period, these amounts are:
Capital outlay 385,288,320
Depreciation expense (157,280,216)
Excess of capital outlay over depreciation expense 228,008,104
In the statement of activities, only the gain(loss) on the sale of assets is reported,
whereas in the governmental funds, the proceeds from the sale increase financial
resources. Thus, the change in net position differs from the change in fund balance by
the book value of the assets sold. (498,854)
Donations of capital assets increase net position in the statement of activities
but do not appear in the governmental funds because they are not financial resources. 20,000
Some of the assets acquired this year were financed through capital leases.
The amount financed is reported in the governmental funds as a source of
financing. However, capital leases are reported as long-term liabilities in the
statement of net position. (145,827)
Based on receipt dates, some revenues are not considered "available" revenues and are
unavailable in the governmental funds. Unavailable revenues increased/decreased by
this amount this year. (21,072,260)
Internal service funds are used by management to charge the costs of certain
activities to individual funds. The net revenue of internal service funds is reported
with governmental activities (3,114,702)
Bonds proceeds provide current financial resources to governmental funds, but issuing
debt increases long-term liabilities in the statement of net position. -
Note proceeds provide current financial resources to governmental funds, but issuing
debt increases long-term liabilities in the statement of net position. (3,344,100)
Voluntary termination benefits do not require current financial resources and therefore are
not reported as expenditures in the governmental funds. 252,229
The pension assets resulting from contributions in excess of annual required contribution
are not financial resources and, therefore, are not reported in the funds. 3,547,406
Deferred outflows of resources do not provide current financial resources
Amortization of deferred loss on bond refunding (366,000)
Related to OPEB 941,139
Related to pension (63,963,918)
Total deferred outflows (63,388,779)
Deferred pension inflows are not considered current cash expenses and are not
reported as an expenditure in the funds
Unpaid penalty and interest (197,051)
Related to OPEB (438,298)
Related to pension (177,672,246)
Total deferred outflows (178,307,595)
The net OPEB liability relating to retirement plans 839,048
The net pension liability relating to retirement plans 198,066,001
Repayment of long-term debt is reported as an expenditure in governmental funds
but the repayment reduces long-term liabilities in the statement of net position.
In the current year, these amounts consist of:
Bond principal retirement 10,220,302
Note payments 10,424,420
Capital lease payments 491,953
Total long-term debt repayment 21,136,675
Some items reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures in the
governmental funds. This adjustment combines the net changes of the following:
Accrued Interest 100,934
Compensated Absences (4,535,101)
Claims and Judgments (12,686)
Total additional expenditures (4,446,853)
Change in Net Position of Governmental Activities $ 937,985,479
The Accompanying Notes are an Integral Part of the Financial Statements
43
STATE OF NORTH DAKOTA
Statement of Net Position
Proprietary Funds
June 30, 2020 Governmental
Business-Type Activities - Enterprise Funds Activities
Bank of Workforce Other
North Housing University Safety and Enterprise Internal
Dakota Finance System Insurance Funds Total Service Funds
ASSETS
Current Assets:
Cash Deposits at the Bank of ND $ 11,155,000 $ 203,038,145 $ 3,227,247 $ 229,424,060 $ 446,844,452 $ 33,511,676
Cash and Cash Equivalents - 16,756,221 - 157,670,836 174,427,057 380,145
Investments at the Bank of ND - 141,933,281 - 1,000,000 142,933,281 252,100
Investments - 116,082 2,121,884,601 51,213,683 2,173,214,366 9,009,559
Accounts Receivable - Net 666,000 28,588,360 25,196,893 93,392,525 147,843,778 272,859
Interest Receivable - Net 33,000 - 10,554,243 3,429,208 14,016,451 53,345
Intergovernmental Receivable - Net 232,000 22,258,613 - 11,229,654 33,720,267 422,982
Due from Other Funds 3,000 31,252,494 44,778 83,327,289 114,627,561 11,940,796
Due from Component Units - 11,240,570 - - 11,240,570 -
Prepaid Items 63,000 - 429,747 4,171,148 4,663,895 4,121,793
Inventory - 6,983,840 - 29,533,414 36,517,254 147,996
Loans and Notes Receivable - Net - 5,401,296 - 27,788,533 33,189,829 -
Other Assets 820,000 2,702,564 - - 3,522,564 -
Restricted Cash at the Bank of ND 17,399,000 - - 6,097,884 23,496,884 -
Restricted Cash and Cash Equivalents 216,924,000 - - 392,000 217,316,000 -
Restricted Investments at the Bank of ND - - - 1,000,000 1,000,000 -
Restricted Interest Receivable - Net 5,143,000 - - - 5,143,000 -
Restricted Loans Receivable - Net 30,160,000 - - 142,000 30,302,000 -
Total Current Assets 282,598,000 470,271,466 2,161,337,509 699,812,234 3,614,019,209 60,113,251
Noncurrent Assets:
Restricted Cash at the Bank of ND - 65,158,930 - - 65,158,930 -
Restricted Investments at the Bank of ND - 3,598,418 - - 3,598,418 -
Restricted Investments 44,619,000 4,120,124 - - 48,739,124 -
Investments at the Bank of ND - 105,346,000 - - 105,346,000 -
Investments - 10,684,371 - - 10,684,371 -
Due from Component Units - 19,837,213 - - 19,837,213 -
Loans and Notes Receivable - Net - 16,830,112 - 417,976,890 434,807,002 -
Restricted Loans Receivable - Net 1,255,924,000 - - - 1,255,924,000 -
Other Noncurrent Assets 5,607,000 197,040 - 6,279,982 12,084,022 -
Capital Assets:
Nondepreciable - 211,970,886 3,733,538 27,532,580 243,237,004 180,060
Depreciable, Net 17,000 1,303,342,892 14,804,769 112,586,632 1,430,751,293 92,614,525
Total Noncurrent Assets 1,306,167,000 1,741,085,986 18,538,307 564,376,084 3,630,167,377 92,794,585
Bank Related Assets:
Cash and Cash Equivalents $ 498,374,000 $ 498,374,000 -
Investments 2,016,126,000 2,016,126,000 -
Interest Receivable - Net 56,672,000 56,672,000 -
Due from Other Funds 72,211,000 72,211,000 -
Loans and Notes Receivable - Net 4,359,956,000 4,359,956,000 -
Other Assets 25,069,000 25,069,000 -
Capital Assets:
Nondepreciable 2,449,000 2,449,000 -
Depreciable, Net 7,324,000 7,324,000 -
Total Bank Related Assets 7,038,181,000 7,038,181,000
Total Assets 7,038,181,000 1,588,765,000 2,211,357,452 2,179,875,816 1,264,188,318 14,282,367,586 152,907,836
DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Bond Refunding - - 3,865,270 - - 3,865,270 -
Decrease in Fair Value of Hedging Derivatives - - - - 735,025 735,025 -
Financial Derivative Instrument - 16,132,000 - - - 16,132,000 -
Unrealized Loss on Interest Rate Swap 24,839,000 - - - - 24,839,000 -
Derived from Pensions 5,438,000 1,289,000 51,059,905 9,020,136 7,155,573 73,962,614 11,944,963
Derived from OPEB 185,000 57,000 2,245,434 349,616 368,473 3,205,523 547,395
Total Deferred Outflows of Resources 30,462,000 17,478,000 57,170,609 9,369,752 8,259,071 122,739,432 12,492,358
The Accompanying Notes are an Integral Part of the Financial Statements
44
STATE OF NORTH DAKOTA
Statement of Net Position
Proprietary Funds
June 30, 2020 Governmental
Business-Type Activities - Enterprise Funds Activities
Bank of Workforce Other
North Housing University Safety and Enterprise Internal
Dakota Finance System Insurance Funds Total Service Funds
LIABILITIES
Current Liabilities:
Accounts Payable 843,000 28,764,937 5,588,924 32,340,088 67,536,949 3,111,285
Accrued Payroll 318,569 41,070,422 - 1,026,530 42,415,521 3,358,284
Securities Lending Collateral - - 6,492,798 80,073 6,572,871 17,338
Interest Payable 19,287,000 4,181,642 - 15,286 23,483,928 5,730
Intergovernmental Payable 19,000 288,722 - 11,235,215 11,542,937 -
Due to Other Funds 13,431 3,382,182 189,977 83,895,415 87,481,005 343,886
Due to Component Units - 4,202,575 - - 4,202,575 -
Contract Retainage Payable - 3,048,764 - - 3,048,764 -
Other Deposits - 8,781,258 - - 8,781,258 -
Amounts Held in Custody for Others 17,399,000 - - 7,582,398 24,981,398 -
Claims/Judgments Payable - - 123,575,040 1,165,234 124,740,274 1,523,912
Dividends Payable - - 107,034,501 - 107,034,501 -
Compensated Absences Payable 9,000 2,796,635 1,512,146 182,589 4,500,370 280,470
Notes Payable - 4,459,734 - - 4,459,734 -
Capital Leases Payable - 3,409,857 - - 3,409,857 21,455
Bonds Payable 32,672,000 14,424,307 - 125,000 47,221,307 -
Unearned Revenue 77,000 24,081,959 104,215,341 451,583 128,825,883 -
Other Current Liabilities - - - 113,068 113,068 -
Total Current Liabilities 70,638,000 142,892,994 348,608,727 138,212,479 700,352,200 8,662,360
Noncurrent Liabilities:
Intergovernmental Payable - 4,100,041 - - 4,100,041 -
Due to Component Units - 29,490,907 - - 29,490,907 -
Claims/Judgments Payable - - 906,216,960 - 906,216,960 7,161,179
Compensated Absences Payable 311,000 30,618,493 246,163 1,320,507 32,496,163 3,074,435
Notes Payable - 12,701,669 - - 12,701,669 -
Capital Leases Payable - 32,390,732 - - 32,390,732 58,251
Bonds Payable 1,299,308,000 405,020,000 - 2,439,534 1,706,767,534 -
Financial Derivative Instrument 16,132,000 - - 735,025 16,867,025 -
Net Pension Liability 2,760,000 109,414,120 17,419,152 13,306,997 142,900,269 25,300,321
Net OPEB Liability 189,000 7,036,908 1,145,698 850,038 9,221,644 1,634,474
Other Noncurrent Liabilities 4,693,000 98,684 - 17,258,432 22,050,116 -
Total Noncurrent Liabilities 1,323,393,000 630,871,554 925,027,973 35,910,533 2,915,203,060 37,228,660
Bank Related Liabilities:
Interest Payable 348,897 348,897 -
Due to Other Funds 2,351,103 2,351,103 -
Due to Component Units 30,000 30,000 -
Federal Funds Purchased 365,335,000 365,335,000 -
Deposits Held for Other Funds 4,215,117,092 4,215,117,092 -
Other Deposits 873,972,908 873,972,908 -
Other Liabilities 29,810,000 29,810,000 -
Long Term Liabilities:
Due within one year 446,020,000 446,020,000 -
Due in more than one year 186,205,000 186,205,000 -
Net Pension Liability 12,031,000 12,031,000 -
Net OPEB Liability 814,000 814,000 -
Total Bank Related Liabilities 6,132,035,000 6,132,035,000
Total Liabilities 6,132,035,000 1,394,031,000 773,764,548 1,273,636,700 174,123,012 9,747,590,260 45,891,020
DEFERRED INFLOWS OF RESOURCES
Grants Received Prior to Time Requirements - - 174,808 - - 174,808 -
Unrealized Gain on Interest Rate Swap 8,381,000 - - - - 8,381,000 -
Derived from Pensions 6,200,000 1,479,000 63,409,087 9,352,752 7,205,228 87,646,067 14,056,156
Derived from OPEB 47,000 13,000 597,281 90,647 33,388 781,316 141,322
Total Deferred Inflows of Resources 14,628,000 1,492,000 64,181,176 9,443,399 7,238,616 96,983,191 14,197,478
NET POSITION
Net Investment in Capital Assets 9,773,000 17,000 1,076,215,390 18,538,308 138,554,677 1,243,098,375 92,714,878
Restricted for:
Capital Projects - - 1,340,114 - - 1,340,114 -
Debt Service - 196,441,000 9,904,514 - 487,000 206,832,514 -
Loan Purposes - - 36,732,214 - - 36,732,214 -
Pledged Assets 829,880,000 - - - - 829,880,000 -
Unemployment Compensation - - - - 262,917,778 262,917,778 -
University System-Nonexpendable - - 17,387,728 - - 17,387,728 -
University System-Expendable - - 17,310,462 - - 17,310,462 -
Other - - 503,776 - 1,434,069 1,937,845 -
Unrestricted 82,327,000 14,262,000 271,188,139 887,627,161 687,692,237 1,943,096,537 12,596,818
Total Net Position $ 921,980,000 $ 210,720,000 $ 1,430,582,337 $ 906,165,469 $ 1,091,085,761 $ 4,560,533,567 $ 105,311,696
Reconciliation of the Proprietary Funds Statement of Net Position
to the Statement of Net Position
June 30, 2020
Total Net Position - Enterprise Funds 4,560,533,567
Amounts reported for business-type activities in the statement of net position are different because:
Prior year net position restatement and reduction of current year expenses
based on the allocation of internal service fund's net income 9,169,518
Net Position of Business-Type Activities 4,569,703,085
The Accompanying Notes are an Integral Part of the Financial Statements
45
STATE OF NORTH DAKOTA
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2020
Governmental
Business-Type Activities - Enterprise Funds Activities
Bank Workforce Other
of Housing University Safety and Enterprise Internal
North Dakota Finance System Insurance Funds Total Service Funds
OPERATING REVENUES
Sales and Services $ 23,352,000 $ 5,577,789 $ 91,122,711 $ 225,934,953 $ 1,110,277,887 $ 1,456,265,340 $ 107,361,149
Auxiliary Sales Pledges for Bonds - - 90,781,941 - - 90,781,941 -
Tuition and Fees - - 338,541,806 - - 338,541,806 -
Federal Funds - - - - 192,440,864 192,440,864 -
Grants and Contributions - - 140,501,308 - - 140,501,308 -
Royalties and Rents - - - 814,651 140,474 955,125 -
Fines and Forfeits - - - 1,470,895 - 1,470,895 -
Interest and Investment Income 255,950,000 52,519,000 - - 7,274,455 315,743,455 -
Miscellaneous - - 1,891,367 2,222,257 7,097,244 11,210,868 88,341
Total Operating Revenues 279,302,000 58,096,789 662,839,133 230,442,756 1,317,230,924 2,547,911,602 107,449,490
OPERATING EXPENSES
Cost of Sales and Services - - 24,927,372 - 189,626,228 214,553,600 1,037,366
Salaries and Benefits 18,802,000 4,210,000 780,356,789 27,437,163 26,771,606 857,577,558 42,879,039
Operating 25,042,000 5,769,000 260,150,718 1,709,918 422,096,607 714,768,243 53,030,789
Claims - - - 88,374,676 613,319,463 701,694,139 4,649,014
Scholarships and Fellowships - - 54,303,073 - - 54,303,073 -
Interest 58,871,000 33,055,000 - - 23,000 91,949,000 -
Depreciation 624,000 7,000 72,345,493 2,096,953 8,552,359 83,625,805 11,346,238
Miscellaneous - - - - 194,988 194,988 46,664
Total Operating Expenses 103,339,000 43,041,000 1,192,083,445 119,618,710 1,260,584,251 2,718,666,406 112,989,110
Operating Income (Loss) 175,963,000 15,055,789 (529,244,312) 110,824,046 56,646,673 (170,754,804) (5,539,620)
NONOPERATING REVENUES (EXPENSES)
Grants and Contracts - 13,490,000 60,856,768 - 751,973 75,098,741 -
Gifts - - 43,357,846 - - 43,357,846 -
Interest and Investment Income - 455,000 11,585,309 125,237,317 7,371,839 144,649,465 545,515
Interest Expense - - (15,347,271) (4,163,241) (1,948,816) (21,459,328) (22,241)
Dividends Expense - - - (96,424,944) - (96,424,944) -
Gain (Loss) on Sale of Capital Assets - - (4,547,141) - 2,057 (4,545,084) 532,268
Tax Revenue - - 6,179,877 - - 6,179,877 -
Grant Expense - (13,490,000) (12,179,705) - - (25,669,705) -
Other (15,000,000) - (6,603,358) - 246,541 (21,356,817) -
Total Nonoperating Revenues
(Expenses) (15,000,000) 455,000 83,302,325 24,649,132 6,423,594 99,830,051 1,055,542
Income (Loss) Before Contributions and
Transfers 160,963,000 15,510,789 (445,941,987) 135,473,178 63,070,267 (70,924,753) (4,484,078)
Capital Grants and Contributions - - 17,501,749 - - 17,501,749 145,250
Transfers In - 9,211 419,893,943 161,354 163,494,417 583,558,925 -
Transfer Out (64,753,000) (44,000) (3,025,000) - (15,627,851) (83,449,851) -
Changes in Net Position 96,210,000 15,476,000 (11,571,295) 135,634,532 210,936,833 446,686,070 (4,338,828)
Total Net Position - Beginning of Year, as restated 825,770,000 195,244,000 1,442,153,632 770,530,937 880,148,928 4,113,847,497 109,650,524
Total Net Position - End of Year $ 921,980,000 $ 210,720,000 $ 1,430,582,337 $ 906,165,469 $ 1,091,085,761 $ 4,560,533,567 $ 105,311,696
Reconciliation of Statement of Revenues, Expenses and Changes in
Fund Net Position of Proprietary Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2020
Net Change in Net Position-Total Enterprise Funds $ 446,686,070
Amounts reported for business-type activities in the statement of net position are different because:
Expenses were reduced based on the allocation of internal service fund's net income (1,112,001)
Change in Net Position of Business-Type Activities $ 445,574,069
The Accompanying Notes are an Integral Part of the Financial Statements
46
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47
STATE OF NORTH DAKOTA
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2020
Business-Type Activities - Enterprise Funds
Bank
of
North Housing University
Dakota Finance System
Cash Flows from Operating Activities:
Receipts from Customers and Users $ 4,541,000 $ 270,510,789 $ 180,606,365
Receipts from Tuition and Fees - - 342,257,626
Interest Income on Loans - - -
Receipts from Loan Principal Repayments - - 5,879,419
Receipts from Federal and Local Agencies - 56,000 -
Receipts from Other Funds - - -
Receipts from Grants and Contracts - - 132,869,515
Receipts from Others - - 1,914,428
Payments to Other Funds - (111,923,000) -
Payments for Loan Funds - - (9,400,960)
Payments for Scholarships and Fellowships - - (45,103,168)
Payments to Suppliers (12,510,000) (199,256,000) (285,375,966)
Payments to Employees (17,418,000) (3,706,000) (767,546,430)
Claim Payments - - -
Payments to Others - (36,000) (649,014)
Other - - -
Net Cash Provided by (Used for) Operating Activities (25,387,000) (44,354,211) (444,548,185)
Cash Flows from Noncapital Financing Activities:
Proceeds from Bonds - 185,204,000 -
Proceeds from Sale of Notes and Other Borrowings 6,330,775,000 - -
Principal Payments - Bonds - (109,720,000) -
Principal Payments - Notes and Other Borrowings (6,803,181,000) - -
Interest Payments - Bonds - (30,104,000) -
Interest Payments - Notes and Other Borrowings (30,041,000) - -
Tax Collections - - 6,179,879
Transfers In - 9,211 26,492,498
Transfers Out (79,753,000) (44,000) (2,353,577)
Net Decrease in Non-Interest Bearing Deposits 60,904,000 - -
Net Increase in Interest Bearing Deposits 258,369,000 - -
Payments of Interest on Deposits (27,189,000) - -
Principal Payments on Advances - - -
Interest Paid on Federal Funds and Reverse Repurchase Agreements (6,461,000) - -
Net Increase in Federal Funds and Reverse Repurchase Agreements 93,830,000 - -
Collection of Advances Made 963,000 - -
Loan Proceeds from Due To Other Funds - 13,566,000 190,497,872
Principal Payments on Due To Other Funds - (13,566,000) (192,057,709)
Grants and Gifts Received for Other than Capital Purposes - 13,490,000 97,124,527
State Appropriations - - 380,204,441
Agency Fund Cash Decrease - - 816,356
Grants Given for Other than Capital Purposes - (13,490,000) (12,179,705)
Net Cash Provided by (Used for) Noncapital Financing Activities (201,784,000) 45,345,211 494,724,582
Cash Flows from Capital and Related Financing Activities:
Acquisition and Construction of Capital Assets (147,000) (11,000) (129,972,054)
Proceeds from Sale of Capital Assets - - 3,855,857
Proceeds from Sale of Notes and Other Borrowings - - 94,784,190
Principal Payments - Bonds - - -
Principal Payments - Notes and Other Borrowings - - (19,508,893)
Interest Payments - Bonds - - -
Interest Payments - Notes and Other Borrowings - - (13,753,146)
Capital Appropriations - - 14,701,908
Capital Contributions - - -
Payment of Bond Issue Costs - - -
Payment on Capital Leases - - -
Interest Payments - Capital Leases - - -
Capital Grants and Gifts Received - - 14,959,786
Insurance Proceeds - - 694,010
Net Cash Provided by (Used for) Capital and Related Financing Activities (147,000) (11,000) (34,238,342)
Cash Flows from Investing Activities:
Proceeds from Sale and Maturities of Investment Securities 1,210,073,000 26,665,000 116,281,669
Purchase of Investment Securities (1,297,020,000) (21,027,000) (112,108,952)
Net Increase In Investments - - -
Interest and Dividends on Investments 53,763,000 325,000 12,120,081
Proceeds from Sale of Other Real Estate 5,565,000 - -
Net Decrease in Loans 35,178,000 - -
Disbursements for Loans and Loan Purchases - - -
Receipt of Loan Principal Repayments - - -
Proceeds from Collection of Loans and Notes Receivable - - -
Loan Income Received 208,441,000 - -
Net Cash Provided by (Used for) Investing Activities 216,000,000 5,963,000 16,292,798
The Accompanying Notes are an Integral Part of the Financial Statements
48
(Continued on Next Page)
Governmental
Business-Type Activities - Enterprise Funds Activities
Workforce Other
Safety and Enterprise Internal
Insurance Funds Total Service Funds
$ 129,978,186 $ - $ 585,636,340 $ 3,691,929
- - 342,257,626 -
- - - -
- - 5,879,419 -
- - 56,000 -
- - - 100,838,160
- - 132,869,515 -
278,004 - 2,192,432 -
(3,432,588) - (115,355,588) (3,045,474)
- - (9,400,960) -
- - (45,103,168) -
- (1,093,000) (498,234,966) (52,571,781)
(24,016,478) - (812,686,908) (38,954,529)
(153,040,051) - (153,040,051) (999,810)
(7,596,833) - (8,281,847) -
- - - -
(57,829,760) (1,093,000) (573,212,156) 8,958,495
- - 185,204,000 -
- - 6,330,775,000 -
- - (109,720,000) -
- - (6,803,181,000) -
- - (30,104,000) -
- - (30,041,000) -
- - 6,179,879 -
44,778 75,000,000 101,546,487 -
- - (82,150,577) -
- - 60,904,000 -
- - 258,369,000 -
- - (27,189,000) -
- (2,700,000) (2,700,000) -
- - (6,461,000) -
- - 93,830,000 -
- - 963,000 -
- - 204,063,872 -
- - (205,623,709) -
- - 110,614,527 -
- - 380,204,441 -
- - 816,356 -
- - (25,669,705) -
44,778 72,300,000 410,630,571 -
(2,848,533) - (132,978,587) (12,588,702)
- - 3,855,857 3,294,537
- - 94,784,190 -
- - - -
- - (19,508,893) -
- - - -
- - (13,753,146) -
- - 14,701,908 -
- - - 145,250
- - - -
- - - (17,147)
- - - (6,257)
- - 14,959,786 -
- - 694,010 -
(2,848,533) - (37,244,875) (9,172,319)
63,000,000 - 1,416,019,669 664,264
(2,010,427) - (1,432,166,379) -
- - - -
- 115,000 66,323,081 268,033
- - 5,565,000 -
- - 35,178,000 -
- (56,649,000) (56,649,000) -
- 12,903,000 12,903,000 -
- - - -
- 3,562,000 212,003,000 -
60,989,573 (40,069,000) 259,176,371 932,297
The Accompanying Notes are an Integral Part of the Financial Statements
49
STATE OF NORTH DAKOTA
Statement of Cash Flows
Proprietary Funds (Continued)
For the Fiscal Year Ended June 30, 2020
Business-Type Activities - Enterprise Funds
Bank
of
North Housing University
Dakota Finance System
Net Change In Cash:
Net Increase (Decrease) in Cash and Cash Equivalents (11,318,000) 6,943,000 32,230,853
Cash and Cash Equivalents at June 30, 2019 509,692,000 238,535,000 252,722,443
Cash and Cash Equivalents at June 30, 2020 $ 498,374,000 $ 245,478,000 $ 284,953,296
Reconciliation:
Current:
Cash Deposits at the Bank of North Dakota - 11,155,000 203,038,145
Cash and Cash Equivalents 498,374,000 - 16,756,221
Restricted Cash Deposits at the Bank of North Dakota - 17,399,000
Restricted Cash and Cash Equivalents - 216,924,000 -
Noncurrent:
Restricted Cash Deposits At The Bank of North Dakota - - 65,158,930
Cash and Cash Equivalents $ 498,374,000 $ 245,478,000 $ 284,953,296
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating Income (Loss) 175,963,000 15,055,789 (529,244,312)
Adjustments to Reconcile Operating
Income to Net Cash Provided by Operating Activities:
Depreciation 624,000 7,000 72,345,493
Amortization/Accretion - (4,407,000) -
Reclassification of Interest Revenue\Expense (197,435,000) 32,869,000 -
(Gain) Loss on Sale of Real Estate (2,264,000) -
Net Increase in Fair Value of Investments (16,505,000) (583,000) -
Interest Received on Program Loans - - -
Dividend Credit Applied to Receivable - - -
Receipt of Loan Principal Repayments - - -
Provision for Losses 6,000,000 - -
Other - - (5,580,950)
Deferred Outflows - 382,000 15,602,220
Deferred Inflows - 1,156,000 46,999,153
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable - (87,586,000) 3,314,156
(Increase) Decrease in Interest Receivable - (469,000) -
(Increase) Decrease in Due From 982,000 2,000 -
(Increase) Decrease in Intergovernmental Receivable - 298,000 -
(Increase) Decrease in Notes Receivable - - (3,322,882)
(Increase) Decrease in Prepaid Items - 2,000 -
(Increase) Decrease in Inventories - - 2,679
(Increase) Decrease in Other Assets (15,633,000) (1,838,000) 3,040,563
Increase (Decrease) in Accounts Payable - - (2,880,188)
Increase (Decrease) in Interest Payable - - -
Increase (Decrease) in Claims\Judgments Payable - - -
Increase (Decrease) in Intergovernmental Payable - 7,000 -
Increase (Decrease) in Accrued Payroll - - 580,105
Increase (Decrease) in Compensated Absences Payable - (24,000) 2,528,657
Increase (Decrease) in Amounts Held for Others - 2,459,000 -
Increase (Decrease) in Other Deposits - - 1,914,438
Increase (Decrease) in Due To (6,000) 315,000 -
Increase (Decrease) in Unavailable Revenue - - 2,962,176
Increase (Decrease) in Net Pension Liability - (1,241,000) (52,699,509)
Increase (Decrease) in Net OPEB Liability (109,984)
Increase (Decrease) in Other Liabilities 22,887,000 (759,000) -
Increase (Decrease) in Dividends Payable - - -
Total Adjustments (201,350,000) (59,410,000) 84,696,127
Net Cash Provided by (Used for) Operating Activities $ (25,387,000) $ (44,354,211) $ (444,548,185)
Noncash Transactions:
Net Change in Fair Value of Investments 16,505,000 790,000 (266,871)
Transfers from Net Position to Transfers Payable 80,109,000 - -
Reduction in pension and OPEB liability - - -
Reinstatement of Debt Expense - - -
Change in Securities Lending Collateral - - -
Investment Income - - -
Dividends Credited to Premium Billing - - -
Accounts Receivable Premium Reduction - - -
Assets Acquired Through Capital Lease - - 660,816
Assets Acquired Through Special Assessments - - 9,808
Expenses Paid by Capital Lease - - 2,060,399
Value Received on Trade of Capital Asset - - -
Gifts of Capital Assets - - 4,072,500
Total Noncash Transactions $ 96,614,000 $ 790,000 $ 6,536,652
The Accompanying Notes are an Integral Part of the Financial Statements
50
Governmental
Business-Type Activities - Enterprise Funds Activities
Workforce Other
Safety and Enterprise Internal
Insurance Funds Total Service Funds
356,058 31,138,000 59,349,911 718,473
2,871,189 34,467,000 1,038,287,632 33,173,348
$ 3,227,247 $ 65,605,000 $ 1,097,637,543 $ 33,891,821
3,227,247 65,605,000 283,025,392 33,511,676
- - 515,130,221 380,145
- - 17,399,000 -
- - 216,924,000 -
- - 65,158,930 -
$ 3,227,247 $ 65,605,000 $ 1,097,637,543 $ 33,891,821
110,824,046 (1,287,000) (228,688,477) (5,539,620)
2,096,953 - 75,073,446 11,346,238
- - (4,407,000) -
- (13,000) (164,579,000) -
- - (2,264,000) -
- - (17,088,000) -
- - - -
(96,424,944) - (96,424,944) -
- - - -
- 1,141,000 7,141,000 -
(12,170) - (5,593,120) -
3,219,960 - 19,204,180 3,144,862
7,797,985 - 55,953,138 11,041,144
1,493,184 - (82,778,660) 68,958
- - (469,000) -
(133,203) - 850,797 (3,045,400)
- - 298,000 (43,727)
- - (3,322,882) -
(34,139) - (32,139) (29,352)
- - 2,679 (25,345)
- - (14,430,437) -
(48,579) - (2,928,767) 232,180
- - - 1,475,956
(61,152,000) - (61,152,000) 559,453
- - 7,000 -
- - 580,105 784,784
130,837 - 2,635,494 919,605
- - 2,459,000 -
- - 1,914,438 -
(18,870) 7,000 297,130 36,852
(11,063,551) - (8,101,375) -
(8,291,437) - (62,231,946) (11,955,230)
(13,261) - (123,245) (12,863)
- - 22,128,000 -
(6,200,571) - (6,200,571) -
(168,653,806) 1,135,000 (343,582,679) 14,498,115
$ (57,829,760) $ (152,000) $ (572,271,156) $ 8,958,495
27,195,370 - 44,223,499 266,729
- - 80,109,000 -
- - - -
- - - -
392,634 - 392,634 (16,541)
99,164,295 - 99,164,295 -
102,625,515 - 102,625,515 -
(102,625,515) - (102,625,515) -
- - 660,816 -
- - 9,808 -
- - 2,060,399 -
- - - -
- - 4,072,500 -
$ 126,752,299 $ - $ 230,692,951 $ 250,188
The Accompanying Notes are an Integral Part of the Financial Statements
51
STATE OF NORTH DAKOTA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2020
Pension and
Other Employee Investment Private-Purpose
Benefit Trust Trust Trust Agency
Funds Funds Funds Funds
ASSETS
Cash Deposits at the Bank of ND $ 37,840,044 $ - $ 5,877,831 $ 43,975,323
Cash and Cash Equivalents 74,910 - 1,269,314 4,729,138
Receivables:
Contributions Receivable 36,282,981 - - -
Accounts Receivable - Net - - 493,019 11,884,341
Taxes Receivable - Net - - - 33,091,555
Interest Receivable - Net 22,924,460 676,798 86,444 150
Due from Other Funds 291 - 16 -
Due from Fiduciary Funds 9,250 - - -
Total Receivables 59,216,982 676,798 579,479 44,976,046
Investments, at Fair Value:
Investments at the Bank of ND - - 21,862 29,958,537
Equities 1,500,306,819 139,173,961 - -
Equity Pool 1,952,520,744 - - -
Fixed Income Pool 1,478,873,466 88,994,710 1,249,929 137,635,344
Cash and Cash Pool 46,919,407 2,340,076 - -
Real Estate Pool 1,068,688,739 44,192,973 - -
Mutual Funds 148,945,821 - 535,837,198 -
Total Investments 6,196,254,996 274,701,720 537,108,989 167,593,881
Invested Securities Lending Collateral 16,782,942 797,457 46,379 -
Capital Assets (Net of Depreciation) 377,659 - - -
Total Assets 6,310,547,533 276,175,975 544,881,992 $ 261,274,388
DEFERRED OUTFLOWS OF RESOURCES
Derived from Pensions 549,008 - -
Total deferred outflows of resources 549,008 - -
LIABILITIES
Accounts Payable 8,200,492 240,861 1,758,518 -
Accrued Payroll 170,382 - - -
Securities Lending Collateral 16,782,942 797,457 46,379 -
Intergovernmental Payable - - - 72,304,762
Tax Refunds Payable - - - 43,847
Due to Other Funds 29,000 - - -
Due to Fiduciary Funds 9,336 - - -
Amounts Held in Custody for Others 38,644 - - 188,925,779
Compensated Absences Payable 152,262 - - -
Total Liabilities 25,383,058 1,038,318 1,804,897 $ 261,274,388
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions 536,950 - -
Total deferred inflows of resources 536,950 - -
NET Position
Net Position Restricted for:
Pension Benefits 6,284,154,064 - -
Other Employee Benefits 1,022,469 - -
External Investment Pool Participants - 275,137,657 -
Other Purposes - - 543,077,095
Total Net Position Restricted for Pension Benefits and Other Purposes 6,285,176,533 275,137,657 543,077,095
The Accompanying Notes are an Integral Part of the Finanacial Statements 52
STATE OF NORTH DAKOTA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2020
Pension and
Other Employee Investment
Benefit Trust Trust Private-Purpose
Funds Funds Trust Funds
ADDITIONS
Contributions:
Employer $ 194,585,515 $ - $ -
Employee 187,458,388 - -
From Participants - - 50,856,817
Transfers from Other Funds 643,721 - -
Transfers from Other Plans 1,459,268 - -
Donations - - 7,774
Total Contributions 384,146,892 - 50,864,591
Investment Income:
Net Change in Fair Value of Investments 91,169,691 4,535,778 63,786,582
Interest and Dividends 129,200,156 5,834,133 13,688,585
Less Investment Expense 15,912,587 699,718 3,040
Net Investment Income 204,457,260 9,670,193 77,472,127
Securities Lending Activity:
Securities Lending Income 302,303 19,905 691
Less Securities Lending Expense 33,911 3,979 -
Net Securities Lending Income 268,392 15,926 691
Repurchase Service Credit 13,758,858 - -
Miscellaneous Income 1,093,974 - 3,068
Total Additions 603,725,376 9,686,119 128,340,477
DEDUCTIONS
Benefits Paid to Participants 450,959,410 - -
Refunds 20,741,287 - -
Prefunded Credit Applied 12,312,461 - -
Transfer to Other Plans 643,721 - -
Payments in Accordance with Trust Agreements - - 44,621,389
Administrative Expenses 6,760,640 - 3,557,630
Total Deductions 491,417,519 - 48,179,019
Redemption of Units at $1.00 Per Unit - (8,367,604) -
Change in Net Position Held in Trust for:
Pension Benefits 112,308,265 - -
Other Employee Benefits (408) - -
External Investment Pool Participants - 1,318,515 -
Other Purposes - - 80,161,458
Total Change in Net Position 112,307,857 1,318,515 80,161,458
Net Position - Beginning of Year 6,172,868,676 273,819,142 462,915,637
Net Position - End of Year $ 6,285,176,533 $ 275,137,657 $ 543,077,095
The Accompanying Notes are an Integral Part of the Financial Statements
53
STATE OF NORTH DAKOTA
Combining Statement of Net Position
Component Units - Proprietary Funds
(Excludes FASB Based Component Units)
June 30, 2020
Public ND
Finance Development State Fair
CHAND Authority Fund Foundation Total
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,267,526 $ - $ 19,652,156 $ 278,756 $ 21,198,438
Accounts Receivable - Net 166,142 - - - 166,142
Interest Receivable - Net - - 140,860 - 140,860
Due from Primary Government - 30,000 - - 30,000
Loans and Notes Receivable - Net - - 4,606,141 - 4,606,141
Restricted Cash and Cash Equivalents - 83,581,000 - 11,057 83,592,057
Restricted Investments - 94,120,000 - - 94,120,000
Restricted Interest Receivable - Net - 5,570,000 - - 5,570,000
Total Current Assets 1,433,668 183,301,000 24,399,157 289,813 209,423,638
Noncurrent Assets:
Restricted Investments - 884,114,000 - - 884,114,000
Due from Primary Government - 30,000 - - 30,000
Loans and Notes Receivable - Net - - 6,928,432 35,000 6,963,432
Capital Assets:
Nondepreciable - - - 1,115,389 1,115,389
Depreciable, Net - - 1,360 - 1,360
Total Noncurrent Assets - 884,144,000 6,929,792 1,150,389 892,224,181
Total Assets 1,433,668 1,067,445,000 31,328,949 1,440,202 1,101,647,819
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding - 3,116,000 - - 3,116,000
Derived from Pensions - 83,000 - - 83,000
Total Deferred Outflows of Resources - 3,199,000 - - 3,199,000
LIABILITIES
Current Liabilities:
Accounts Payable 591,095 37,000 6,185 21,500 655,780
Interest Payable - 4,537,000 - - 4,537,000
Notes Payable - - - 4,591 4,591
Bonds Payable - 25,665,000 - - 25,665,000
Unearned Revenue 42,066 - - - 42,066
Total Current Liabilities 633,161 30,239,000 6,185 26,091 30,904,437
Noncurrent Liabilities:
Due to Primary Government - - 102,855 - 102,855
Notes Payable - - - 69,749 69,749
Bonds Payable - 494,762,000 - - 494,762,000
Net Pension Liability - 191,000 - - 191,000
Total Noncurrent Liabilities - 494,953,000 102,855 69,749 495,125,604
Total Liabilities 633,161 525,192,000 109,040 95,840 526,030,041
DEFERRED INFLOWS OF RESOURCES
Derived from Pensions - 103,000 - - 103,000
Total Deferred Inflows of Resources - 103,000 - - 103,000
Net Position
Net Investment in Capital Assets - - 1,360 - 1,360
Restricted for:
Debt Service - 114,641,000 - - 114,641,000
Loan Purposes - 428,761,000 - - 428,761,000
Endowment Funds-Nonexpendable - - - 2,155,492 2,155,492
Unrestricted 800,507 1,947,000 31,218,549 (811,130) 33,154,926
Total Net Position $ 800,507 $ 545,349,000 $ 31,219,909 $ 1,344,362 $ 578,713,778
The Accompanying Notes are an Integral Part of the Financial Statements 54
STATE OF NORTH DAKOTA
Combining Statement of Activities
Component Units - Proprietary Funds
(Excludes FASB Based Component Units)
For the Fiscal Year Ended June 30, 2020
Program Revenues General Revenues
Operating Net Payments from Change Net Position Net Position
Charges for Grants and (Expense) State of in Beginning of Year, End
Functions/Programs Expenses Services Contributions Revenue North Dakota Net Position as Restated of Year
CHAND $ 3,357,828 $ 2,193,640 $ 36,137 $ (1,128,051) $ - $ (1,128,051) $ 1,928,558 $ 800,507
Public Finance Authority 25,659,000 3,606,000 45,816,000 23,763,000 - 23,763,000 521,586,000 545,349,000
ND Development Fund 7,495,022 985,940 88,177 (6,420,905) 15,000,000 8,579,095 22,640,814 31,219,909
State Fair Foundation 1,102,151 7,136 90,419 (1,004,596) - (1,004,596) 2,348,958 1,344,362
Total Component Units $ 37,614,001 $ 6,792,716 $ 46,030,733 $ 15,209,448 $ 15,000,000 $ 30,209,448 $ 548,504,330 $ 578,713,778
The Accompanying Notes are an Integral Part of the Financial Statements
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STATE OF NORTH DAKOTA
Index
Page
Note 1 - Summary of Significant Accounting Policies ................................................................... 58
A. Reporting Entity ..................................................................................................................... 58
B. Government-wide and Fund Financial Statements ............................................................... 59
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation .............. 60
D. General Budgetary Policies and Procedures ........................................................................ 62
E. Cash and Cash Equivalents .................................................................................................. 62
F. Investments ........................................................................................................................... 63
G. Securities Lending ................................................................................................................. 64
H. Interfund Activity and Balances ............................................................................................. 64
I. Inventories and Prepaid Items ............................................................................................... 64
J. Bond Premiums / Discounts .................................................................................................. 65
K. Capital Assets ........................................................................................................................ 65
L. Deferred Outflows of Resources ........................................................................................... 66
M. Lease Commitments .............................................................................................................. 66
N. Federal Funds Purchased ..................................................................................................... 66
O. Claims/Judgments Payable ................................................................................................... 66
P. Compensated Absences ....................................................................................................... 66
Q. Deposits ................................................................................................................................. 66
R. Net Pension Liability .............................................................................................................. 67
S. Net Other Post-Employment Benefits Liability ...................................................................... 67
T. Deferred Inflows of Resources .............................................................................................. 67
U. Net Position/Fund Balance .................................................................................................... 67
V. Revenues and Expenditures/Expenses................................................................................. 68
W. Estimates ............................................................................................................................... 69
Note 2 - Restatements ....................................................................................................................... 69
Note 3 - Detailed Notes on Account Balances ................................................................................ 69
A. Deposits ................................................................................................................................. 69
B. Investments ........................................................................................................................... 70
C. Securities Lending ................................................................................................................. 79
D. Endowment Funds ................................................................................................................. 79
E. Receivables ........................................................................................................................... 80
F. Reverse Repurchase Agreements ........................................................................................ 81
G. Interfund Accounts and Transfers ......................................................................................... 81
H. Capital Assets ........................................................................................................................ 84
I. Operating Leases .................................................................................................................. 87
J. Capital Leases ....................................................................................................................... 87
K. Deferred Outflows of Resources ........................................................................................... 88
L. Long-Term Debt..................................................................................................................... 88
M. Arbitrage Rebate Payable ..................................................................................................... 95
N. Deferred Inflows of Resources .............................................................................................. 95
O. Fair Value of Financial Instruments ....................................................................................... 95
Note 4 - Net Position .......................................................................................................................... 99
Note 5 - Fund Balance ....................................................................................................................... 99
56
Notes To The Financial Statements
Page
Note 6 - Retirement Systems .......................................................................................................... 101
A. Description of Plans ............................................................................................................. 101
B. Summary of Significant Accounting Policies and Plan Asset Matters ................................. 107
C. Funding Status and Progress .............................................................................................. 109
D. Single Employer Pension Plans .......................................................................................... 113
E. Cost Sharing Employer Pension Plans................................................................................ 115
F. Pension Summary ............................................................................................................... 118
G. Defined Contribution Plan .................................................................................................... 118
H. Teachers’ Insurance Annuity Association ........................................................................... 119
Note 7 - Post-Retirement Benefits .................................................................................................. 119
A. Retiree Health Insurance Credit – Plan Information ............................................................ 119
B. Retiree Health Insurance Credit – State’s Share ................................................................ 121
C. Job Service North Dakota – Met Life Insurance Benefit...................................................... 122
D. OPEB Summary .................................................................................................................. 124
Note 8 - Deferred Compensation Plan ........................................................................................... 125
Note 9 - PERS Uniform Group Insurance Program ...................................................................... 125
Note 10 - Segment Information ......................................................................................................... 126
Note 11 - Major Component Unit Transactions............................................................................... 126
Note 12 - Financial Instruments With Off-Balance-Sheet Risk...................................................... 132
Note 13 - Interest Rate Swap............................................................................................................. 133
Note 14 - Significant Concentrations of Credit Risk ...................................................................... 137
Note 15 - Risk Management .............................................................................................................. 137
Note 16 - Public Entity Risk Pools ................................................................................................... 139
A. General ................................................................................................................................ 139
B. Reconciliation of Claims Liabilities ...................................................................................... 140
Note 17- Bank of North Dakota ........................................................................................................ 140
Note 18 - Commitments and Contingencies ................................................................................... 141
A. Long-Term Commitments .................................................................................................... 141
B. Litigation .............................................................................................................................. 142
C. Questioned Costs ................................................................................................................ 143
Note 19 - Tobacco Settlement........................................................................................................... 143
Note 20 - Termination Benefits ......................................................................................................... 143
Note 21 - Subsequent Events ........................................................................................................... 143
Note 22 - New Pronouncements ....................................................................................................... 144
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STATE OF NORTH DAKOTA
NOTES TO THE FINANCIAL STATEMENTS
For the Fiscal Year Ended June 30, 2020
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The primary authority for the State’s accounting and reporting requirements is the Office of Management and Budget. The
Office of Management and Budget has adopted the pronouncements of the Governmental Accounting Standards Board
(GASB), which is the nationally accepted standard-setting body for establishing governmental accounting and financial
reporting principles. The more significant of the State’s accounting policies are as follows:
A. REPORTING ENTITY
For financial reporting purposes, the State of North Dakota has included all funds, organizations, agencies, boards and
commissions that make up its legal entity. The State has also included all potential component units for which it is financially
accountable, and other organizations for which the nature and significance of their relationship with the State are such that
exclusion would cause the State’s financial statements to be misleading or incomplete. The Governmental Accounting
Standards Board has set forth criteria to be considered in determining financial accountability. These criteria include
appointing a voting majority of an organization’s governing body and (1) the ability of the State to impose its will on that
organization or (2) the potential for the organization to provide specific financial benefits to, or impose specific financial
burdens on the State.
As required by accounting principles generally accepted in the United States of America, these financial statements present
the State of North Dakota (the primary government) and its component units. The component units are included in the
State’s reporting entity because of the significance of their operational or financial relationships with the State.
BLENDED COMPONENT UNITS
These component units are entities that are legally separate from the State, but are so intertwined with the State that they
are, in substance, the same as the State. They are reported as part of the State and blended into the appropriate fund
types.
Building Authority (Debt Service Fund and Capital Projects Fund) - The Building Authority was created by the
Legislature as a separate instrumentality of the State. Its purpose is to promote the general welfare of the citizens of the
State by providing financing for use by the State in altering, repairing, maintaining or constructing buildings and making
any improvements connected to State buildings. The Industrial Commission, which consists of the governor, the attorney
general, and the commissioner of agriculture, is the governing board of the Building Authority. The funds of the Building
Authority were audited by other independent auditors for the fiscal year ended June 30, 2020, and their report has been
previously issued under a separate cover.
DISCRETELY PRESENTED COMPONENT UNITS
These component units are entities that are legally separate from the State, but are financially accountable to the State.
The component units’ columns of government-wide financial statements include the financial data of these entities.
MAJOR COMPONENT UNITS
Comprehensive Health Association (Proprietary Fund Type) – The Association was established by the Legislature with
participating membership consisting of those insurance companies, licensed or authorized to do business in the State. It
provides low cost access to health insurance coverage for residents of the State who are denied adequate health insurance
and are considered uninsurable. Under North Dakota Century Code, the Majority Leader of the Senate appoints one
member of the Senate and the House of Representatives appoints one member of the House to the eight-member board.
The Association was audited by other independent auditors for the calendar year ended December 31, 2019, and their
report has been previously issued under a separate cover.
Public Finance Authority (Proprietary Fund Type) – The Finance Authority was created by the Legislature as a separate
agency of the State. The purpose of the Finance Authority is to make funds available for borrowing by North Dakota political
subdivisions through the issuance of its bonds and the purchase of municipal securities of the political subdivisions. The
Finance Authority has been granted all powers required in order to accomplish this purpose and is under the control and
management of the Industrial Commission. The Fund was audited by other independent auditors for the calendar year
ended December 31, 2019, and their report has been previously issued under a separate cover.
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STATE OF NORTH DAKOTA
North Dakota Development Fund, Inc. (Proprietary Fund Type) – The Development Fund was established as a
statewide nonprofit development corporation with the authority to take equity positions in; to provide loans to; or to use
other innovative financing mechanisms to provide capital for new or expanding businesses in North Dakota or relocating
businesses to North Dakota. A board of directors consisting of eight members, all of whom are appointed by the governor,
manages the corporation. The deputy director of the Department of Commerce (a State agency) is the corporation's chief
executive officer. The director of the Department of Commerce (governor-appointed cabinet position) is responsible for
developing rules, subject to the approval of the board of directors, necessary to implement the administration of the
corporation. The Fund was audited by other independent auditors for the fiscal year ended June 30, 2020, and their report
has been previously issued under a separate cover.
North Dakota State Fair Foundation – The mission of the North Dakota State Fair Foundation is to develop lifelong
relationships with donors to secure philanthropic gifts that will enhance and support the work of the North Dakota State
Fair. The Fund of the North Dakota State Fair Foundation were audited by other independent auditors for the fiscal year
ended September 30, 2019, and their report has been previously issued under a separate cover.
Major and Non-major University System Foundations (Proprietary Fund Type) – The foundations are legally separate,
tax-exempt organizations providing support and recognition to their respective colleges and universities through a variety
of programs and activities. The foundations are normally managed by a board of directors made up primarily of alumni,
friends or leading members of the communities. The component unit financial statements are presented under Financial
Accounting Standards Board (FASB) standards. As such, certain disclosures are not reflected for the Major University
System Foundation in the major component unit disclosures and no disclosures are included for the Non-major University
System Foundation. A complete set of financial statements can be obtained at the North Dakota University System office
at 600 E. Boulevard Avenue, #10, Bismarck, ND 58505.
Non-major State Historical Society of North Dakota Foundation – The mission of the State Historical Society of North
Dakota Foundation is to provide fundraising and membership development activities to support the State Historical Society
of North Dakota which preserves and promotes the heritage of North Dakota and its people. The Fund of the State Historical
Society of North Dakota Foundation were audited by other independent auditors for the fiscal year ended June 30, 2020,
and their report has been previously issued under a separate cover. The component unit financial statements are presented
under Financial Accounting Standards Board (FASB) standards. As such, certain disclosures are not reflected for the
Foundation and no disclosures are included for the Foundation.
Complete financial statements for each of the other individual component units may be obtained at the entity’s
administrative offices as follows:
Building Authority Public Finance Authority
600 E. Boulevard Ave., 14th Floor 1200 Memorial Highway
Bismarck, ND 58505-0840 Bismarck ND 58504
Comprehensive Health Associations North Dakota Development Fund, Inc.
4510 13th Ave. South 1600 E. Century Ave., #2
Fargo, ND 58121 Bismarck, ND 58503
State Historical Society of North Dakota Foundation North Dakota State Fair Foundation
P.O. Box 1976 P.O. Box 1796
Bismarck, ND 58502-1976 Minot, ND 58702-1796
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The Statement of Net Position and Statement of Activities report information on all non-fiduciary activities of the primary
government and its component units. Primary government activities are distinguished between governmental and
business-type activities.
Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange
revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services.
The Statement of Net Position presents the reporting entity’s non-fiduciary assets, deferred outflows of resources, liabilities,
and deferred inflows of resources, with the difference reported as net position. Net position is reported in three categories:
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STATE OF NORTH DAKOTA
Net investment in capital assets consists of capital assets, net of accumulated depreciation and reduced by outstanding
balances for bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement of those
assets.
Restricted net position result when constraints placed on net position use are either externally imposed by creditors,
grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. Net position
restricted by enabling legislation are subject to change by a majority vote of the Legislative Assembly.
Unrestricted net position consist of net position that do not meet the definition of the two preceding categories.
Unrestricted net position often are designated, to indicate that management does not consider them to be available for
general operations. Unrestricted net position often have constraints on resources which are imposed by management, but
can be removed or modified.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset
by program revenues. Direct expenses are those that are clearly identifiable within a specific function. Program revenues
include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not meeting the definition of program revenues are instead
reported as general revenue.
FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though
the latter are excluded from the government-wide statements. Major individual governmental funds and major individual
proprietary funds are reported as separate columns in the fund financial statements, with non-major funds being combined
into a single column.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government-wide statements are reported using the economic resources measurement focus and the accrual basis
of accounting, as are the proprietary and fiduciary fund (agency funds are excluded as they have no measurement focus)
financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of cash flows.
The State follows the pronouncements of the Governmental Accounting Standards Board (GASB), which is the nationally
accepted standard-setting body for establishing accounting principles generally accepted in the United States of America
for governmental entities.
Governmental fund statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as they become susceptible to accrual; generally when they are
both measurable and available. Revenues are considered to be available when they are collected within the current period
or soon enough thereafter to pay liabilities of the current period.
The State considers tax revenues to be available if they are collected within 60 days of the end of the current fiscal year
end. Other revenues are considered to be available if received within one year after the fiscal year end. Major revenues
that are determined to be susceptible to accrual include interest, federal grants-in-aid, and taxpayer-assessed taxes such
as income, sales, corporate, excise, motor fuel taxes and unemployment compensation contributions. Revenues earned
under the terms of reimbursement agreements with other governments or private sources are recorded at the time the
related expenditures are made if other eligibility requirements have been met. Sales and use taxes are accrued based
upon filings received and an estimate of filings due by June 30. Net income taxes from individuals and corporations are
accrued based on current income earned by the taxpayer before June 30. Quarterly filings, withholding statements, and
other historical data are used to estimate income. The revenue is accrued net of an allowance for uncollectible taxes.
Unearned revenue is recorded for receivables that are measurable but not available at year-end.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures
related to debt service, compensated absences, and claims and judgments, are recorded only when payment is due and
payable.
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STATE OF NORTH DAKOTA
FINANCIAL STATEMENT PRESENTATION
The State reports the following major governmental funds:
The General Fund is the principal operating fund of the State.
The Federal Fund accounts for all the financial resources from the federal government.
The State Special Revenue Fund accounts for activities from state sources, which are restricted legally or administratively
for the particular costs of an agency or program.
The State reports the following major enterprise funds:
The Bank of North Dakota Fund finances economic development throughout the state, participates in loans with North
Dakota financial institutions, and holds interest-bearing deposit accounts for state and political subdivisions of North
Dakota.
The Housing Finance Agency Fund is authorized to issue bonds to make loans to mortgage lenders for qualified residential
mortgage loans and to make mortgage and construction loans for multi-family housing within the State of North Dakota.
The University System Fund accounts for all financial transactions of the colleges and universities that compose the
University System of North Dakota.
The Workforce Safety & Insurance Fund is financed entirely by premiums assessed to the employers of North Dakota and
provides no-fault medical and disability insurance to all North Dakota employees.
Additionally, the State reports the following fund types:
GOVERNMENTAL FUND TYPES
General Fund accounts for all governmental financial resources, except for those required to be accounted for in other
funds.
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or
committed to expenditure for specified purposes other than debt service or capital projects.
Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to
expenditure for principal and interest.
Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned
to expenditure for capital outlays including the acquisition or construction of capital facilities and other capital assets. Capital
project funds exclude those types of capital related outflows financed by proprietary funds or for assets that will be held in
trust for individuals, private organizations, or other governments.
Permanent Funds report resources that are legally restricted to the extent that only earnings, and not principal, may be
used for purposes that benefit the government or its citizenry, such as the common schools within the state.
PROPRIETARY FUND TYPES
Enterprise Funds account for those business-like State activities that provide goods/services to the public, financed
primarily through user charges. They are also used to account for operations where the governing body has decided that
periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance,
public policy, management control, accountability and other purposes. The State’s loan programs, Mill and Elevator, and
Fair are reported in this type.
Internal Service Funds account for the financing of goods and/or services provided by one department or agency to another
department or agency of a government, or to other governments, on a cost-reimbursement basis. These goods and
services include motor pool services; printing, reproduction and mailing services; information technology; and risk
management services. In the government-wide statements, internal service funds are included with governmental activities.
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STATE OF NORTH DAKOTA
FIDUCIARY FUND TYPES
Pension and Other Employee Benefits Trust Funds account for resources that are required to be held in trust for the
members and beneficiaries of the State’s defined benefit pension plans, defined contribution plan, deferred compensation
plan, pretax benefits program, and other post-employment benefit plans.
Investment Trust Funds account for the transactions, assets, liabilities, and fund equity of the external pool participants
(City of Bismarck, City of Grand Forks, City of Grand Forks Park District, ND Association of Counties, City of Fargo
Fargodome, North Dakota State Board of Medicine, Petroleum Tank Release Compensation Fund, Lewis and Clark
Interpretive Center Endowment Fund, Veteran’s Cemetery Trust Fund and Retirement and Investment Office Investments).
The State Investment Board (SIB) provides administrative services for the external pool participants. SIB issues a publicly
available financial report that may be obtained by writing to the Retirement and Investment Office, 3442 East Century
Avenue, Bismarck, North Dakota 58503. Investment Trust Funds are accounted for in essentially the same manner as
Proprietary Funds.
Private Purpose Trust Funds account for resources of all other trust arrangements in which principal and income benefit
individuals, private organizations, or other governments. Examples include student donations, the State’s college savings
plan, and a remediation trust.
Agency Funds account for assets held by the State as an agent for other governmental units, or other organizations, and
do not involve measurement of results of operations. Examples of funds in this category include state agency funds for
bonding, tax collection, child support disbursement, and funds held for others.
D. GENERAL BUDGETARY POLICIES AND PROCEDURES
The State operates through a biennial appropriation that represents departmental appropriations recommended by the
governor and presented to the Legislative Assembly at the beginning of each legislative session. The Legislative Assembly
enacts the budgets of the various state departments through passage of specific appropriation bills. The governor has line
item veto powers over all appropriations subject to legislative override.
Once passed and signed, the appropriation bill becomes the departments' financial plan for the next two years. Changes
to the appropriation are limited to Emergency Commission authorization, initiative, allotment, or referendum action. The
Emergency Commission can authorize receipt of federal or other moneys not appropriated by the Assembly if the Assembly
did not indicate intent to reject the money. The Emergency Commission may authorize pass-through federal funds from
one state agency to another. The Emergency Commission may authorize the transfer of expenditure authority between
appropriated line items. The Legislature has also passed appropriation laws that authorize directors of certain state
agencies to transfer appropriation authority among the various divisions of their specific agency, subject to the Budget
Section of the North Dakota Legislative Council's approval. Unexpended appropriations lapse at the end of each biennium,
except certain capital expenditures covered under the North Dakota Century Code (NDCC) section 54-44.1-11 and the
University System’s unexpended general fund appropriation authority.
The State’s biennial budget is prepared primarily on a cash basis. The State does not use encumbrance accounting. The
legal level of budgetary control is at the agency, appropriation, funding source and expenditure line item level, with
administrative controls established at lower levels of detail in certain instances. The State does not formally budget
revenues, and it does not budget by fund. The State appropriation is defined through the use of specific expenditure line
items. Capital appropriations are generally made at the agency and project level.
North Dakota's Appropriation Act does not present budgets by GAAP fund. Instead, it authorizes General Fund
appropriation authority by agency and Other Budgeted Income appropriation authority by agency. Other budgeted income
includes all budgeted resources, other than the General Fund, and includes some governmental, proprietary, and fiduciary
fund activities.
During the 2019-2021 biennium, there were general, federal and other funds supplemental appropriations totaling
$1,157,610,655.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for reporting purposes includes cash and short-term, highly liquid investments that are readily
convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value
because of changes in interest rates. This includes investments with original maturity of three months or less. Also cash,
as reported, may be under the control of the State Treasurer or by other administrative bodies as determined by law. Cash
and cash equivalents are presented on the fund balance sheets as "Cash Deposits at the Bank of North Dakota" and "Cash
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STATE OF NORTH DAKOTA
and Cash Equivalents" to present the unique nature of the relationship between the Bank of North Dakota, an enterprise
fund, and other state agencies.
Cash Deposits at the Bank of North Dakota – State agency cash balances, as required by law, are pooled by the State
Treasurer and deposited in the Bank of North Dakota, an enterprise fund. These cash balances, in addition to other agency
cash deposited at the Bank of North Dakota, are included on the fund balance sheets as "Cash Deposits at the Bank of
North Dakota". For purposes of the Government-wide Statement of Net Position, these amounts have been reclassified to
internal balances.
Cash and Cash Equivalents – All cash and cash equivalents, (other than cash deposits at the Bank of North Dakota), as
permitted by the North Dakota Century Code, are included on the Government-wide Statement of Net Position as "Cash
and Cash Equivalents".
The State had no cash overdrafts from pooled cash and investments at June 30, 2020.
All interest revenue is allocated to the General Fund unless state law (as outlined in the North Dakota Century Code)
requires allocations of interest to other funds.
F. INVESTMENTS
Investments are reported at fair value. Quoted market prices, when available, have been used to value investments. The
fair value for securities that have no quoted market price represent estimated fair value. International securities are valued
based upon quoted foreign market prices and translated into U.S. dollars at the exchange rate in effect at June 30. In
general, corporate debt securities have been valued at quoted market prices or, if not available, values are based on yields
currently available on comparable securities of issuers with similar credit ratings. Mortgages have been valued on the basis
of their future principal and interest payments discounted at prevailing interest rates for similar instruments. The fair value
of real estate investment securities, including timberland, is based on appraisals plus fiscal year-to-date capital
transactions. Publicly traded alternative investments are valued based on quoted market prices. When not readily available,
alternative investment securities are valued using current estimates of fair value from the investment manager. Such
valuations consider variables such as financial performance of the issuer, comparison of comparable companies’ earnings
multiples, cash flow analysis, recent sales prices of investments, withdrawal restrictions, and other pertinent information.
Because of the inherent uncertainty of the valuation for these other alternative investments, the estimated fair value may
differ from the values that would have been used had a ready market existed.
The net change in fair value of investments consists of the realized gains or losses and the unrealized increase or decrease
in fair value of investments during the year. Realized gains and losses on sales of investments are computed based on the
difference between the sales price and the original cost of the investment sold.
Unrealized gains and losses are computed based on changes in the fair value of investments between years. Security
transactions are currently accounted for on a trade date basis. Interest income is recorded when earned. Dividend income
is recorded on the ex-dividend date.
Purchases of other state funds' debt issues by the Bank of North Dakota have been recorded as normal business
transactions if they are the result of arms-length transactions.
Investments are presented on the fund balance sheets as "Investments at the Bank of North Dakota" and "Investments" to
present the unique nature of the relationship between the Bank of North Dakota, an enterprise fund, and other state
agencies.
Investments at the Bank of North Dakota – State agency investments, primarily certificates of deposits of the Bank of
North Dakota, are included on the fund balance sheets as "Investments at the Bank of North Dakota.” For purposes of the
Government-wide Statement of Net Position, these amounts have been reclassified to internal balances.
Investments – State agency investments invested at financial institutions other than the Bank of North Dakota are included
on the Government-wide Statement of Net Position as "Investments.” Differences on the Fund Balance Sheets between
the assets, “Cash at the Bank of North Dakota” and “Investments at the Bank of North Dakota,” and the liability, "Deposits
Held for Other Funds," is attributable to timing differences resulting from the Bank of North Dakota having a different fiscal
year end than many of the other state agencies.
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STATE OF NORTH DAKOTA
G. SECURITIES LENDING
GASB Statement No. 28 “Accounting and Financial Reporting for Securities Lending Transactions,” establishes accounting
and financial reporting standards for securities lending transactions. The standard requires governmental entities to report
securities lent as assets in their statements of net position. Cash received as collateral and investments made with that
cash must also be reported as both an asset and a liability. The statement also requires the costs of the securities lending
transactions to be reported as expenses separately from income received. In addition, the statement requires disclosures
about the transactions and collateral related to them.
The Agent lends securities of the type on loan at June 30, 2020, for collateral in the form of cash, U.S. government securities
and irrevocable letters of credit. U.S. securities are loaned versus collateral valued at 102% of the market value of the
securities plus accrued interest. Non-U.S. securities are loaned versus collateral valued at 105% of the market value of the
securities plus accrued interest.
Non-cash collateral cannot be pledged or sold unless the borrower defaults. All securities can be terminated on demand
by either the lender or the borrower, although the average term of the loans State’s loans was approximately 232 days as
of June 30, 2020. Cash open collateral is invested in a short term investment pool, which had an interest sensitivity of 1
day as of this statement date. This pool is valued based on amortized cost. There were no violations of legal or contractual
provisions, no borrower or lending agent default losses known to the securities lending agent. There are no dividends or
coupon payments owing on the securities lent. Securities lending earnings are credited to participating clients on
approximately the fifteenth day of the following month.
Indemnification deals with the situation in which a client’s securities are not returned due to the insolvency of a borrower
and the Agent has failed to live up to its contractual responsibilities relating to the lending of those securities. The Agent’s
responsibilities include performing appropriate borrower and collateral investment credit analyses, demanding adequate
types and levels of collateral, and complying with applicable Department of Labor and Federal Financial Institutions
Examination Council regulations concerning securities lending.
For securities loaned at fiscal year end, the State has no credit risk exposure to borrowers because the amounts the State
owes the borrowers exceeds the amounts the borrowers owe the State.
H. INTERFUND ACTIVITY AND BALANCES
INTERFUND ACTIVITY
As a general rule, the effect of interfund activity has been eliminated from the government-wide statements. Exceptions to
this rule are: 1) activities between funds reported as governmental activities and funds reported as business-type activities
and 2) activities between funds that are reported in different functional categories in either the governmental or business-
type activities column. Elimination of these activities would distort the direct costs and program revenues for the functions
concerned.
In the fund financial statements, transfers represent flows of assets (such as goods or cash) without equivalent flows of
assets in return or a requirement for repayment. Residual transfer amounts exist in the Government-wide Statement of
Activities due to different fiscal year ends of various agencies included in business-type activities.
INTERFUND BALANCES
Interfund receivables and payables have been eliminated from the Statement of Net Position, except for the residual
amounts due between governmental and business-type activities.
I. INVENTORIES AND PREPAID ITEMS
Inventories of Governmental Funds are valued at cost and are recognized principally using the average cost method.
Generally, the cost of Governmental Funds' inventories is recorded as an expenditure when consumed rather than when
purchased.
Inventories of Proprietary Funds consist primarily of grain inventories from the North Dakota Mill and Elevator Association.
Grain inventories are valued at the June 30 Minneapolis grain market values less freight costs to Minneapolis. Flour, feed
and resale inventories are valued at ingredient cost plus manufacturing costs incurred in their production. Proprietary Funds
expense the cost of consumable supplies when used.
Generally, inventories of University System Funds are valued at the lower of cost or fair market value. Cost is generally
determined on the first in/first out, or moving weighted average method. Inventories consist of food, books, and other
merchandise held for resale in auxiliaries and unrestricted physical plant supplies.
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Prepaid items reflect payments for costs applicable to future accounting periods. The cost of governmental prepaid items
are recorded as expenditures when purchased.
Other government fund inventories and prepaid items are reflected as a reservation of fund balance on the balance sheet.
J. BOND PREMIUMS / DISCOUNTS
In the governmental funds, bond discounts and premiums are treated as period costs in the year of issue. Bond discounts
and premiums are shown as an “other financing source (use)” in the statement of revenues, expenses and changes in fund
balance.
In the proprietary funds, bond premiums and discounts are deferred and amortized over the term of the bonds using the
effective interest method. The unamortized discount is shown on the statement of net position as a reduction of the bonds
payable, and the amortization is included in the statement of revenues, expenses and changes in fund balance as interest
expense.
K. CAPITAL ASSETS
Capital assets, which include land, buildings, equipment, intangibles (software, easements and other), construction in
progress and infrastructure assets, are valued at historical cost or at estimated historical cost if actual historical cost is not
available. Donated capital assets are valued at their acquisition value on the date of donation. Where necessary, estimates
of original cost are derived by factoring price levels from the current period to the time of acquisition. Library books are not
capitalized as capital assets except for the University System.
All other capital assets with an original cost of $5,000 or more per unit and an estimated useful life in excess of one year
are capitalized and reported in the applicable government or business-type activities columns in the government-wide
financial statements. Exceptions include: infrastructure reported by the Department of Transportation, the threshold is
$100,000 and intangible assets such as easements, water rights, patents and trademarks, the threshold is $25,000. Capital
asset costs include the purchase price or construction cost, plus the costs necessary to place the asset in its intended
location and condition for use. In governmental activities, interest costs on self-constructed assets are not capitalized. In
business-type activities, interest costs (if material) on self-constructed assets are also included in the cost. The amount of
interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion
of the project with interest earned on invested proceeds over the same period. Capitalized interest is amortized on the
straight-line basis over the estimated useful life of the asset. Normal maintenance and repair costs that do not materially
add to the value or extend the life of the asset are not capitalized.
Collections of works of art and historical treasures are not capitalized if the following three criteria are met: (1) Held for
public exhibition, education, or research in furtherance of public service, rather than financial gain; (2) Protected, kept
unencumbered, cared for, and preserved; (3) Subject to organizational policy that requires the proceeds from sales of
collection items to be used to acquire other items for collections. The State’s non-capitalized collections include the
historical artifacts at the various state museums and historical sites, and monuments and other art throughout the capital
grounds. Assets that do not meet all three criteria, or that were capitalized as of June 30, 1999, are capitalized and included
in the government-wide financial statements.
Infrastructure consists of major statewide public systems and items attached thereto such as freeways, freeway lighting
systems, freeway drainage systems, freeway signs, bridges, bridge lighting systems, and sewer systems, including those
infrastructure assets acquired prior to June 30, 1980. Infrastructure is reported in the applicable governmental or business-
type activities columns in the government-wide financial statements. The Department of Transportation uses the first-in
first-out method to remove the capitalized cost of a replaced road along with corresponding accumulated depreciation.
Capital assets in Governmental Funds are recorded as expenditures in the funds used to acquire or construct them in the
governmental fund financial statements. Capital assets, along with accumulated depreciation and depreciation expense,
which includes amortization of intangible assets, are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements.
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Land and construction in progress are not depreciated. With the exception of infrastructure reported by the Department of
Transportation (which uses the composite method), other capital assets are depreciated using the straight-line method
over the following estimated useful lives:
Assets Years
Buildings 10-50
Infrastructure 10-50
Furniture, Automobiles, and Equipment 3-20
Intangibles 3-99
L. DEFERRED OUTFLOWS OF RESOURCES
Deferred outflow of resources represents a consumption of net position by the government that applies to a future period(s)
and so will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources
are reported in the applicable governmental or business-type activities columns, or in the component units column on the
government-wide Statement of Net Position.
M. LEASE COMMITMENTS
The State leases land, office facilities, office and computer equipment, and other assets. Leases are classified according
to GASB 62. Many of these leases have fiscal funding clauses; however, these clauses have no effect on classifying these
leases for accounting purposes. Leases which represent acquisitions are classified as capital leases, and the related assets
and liabilities are recorded in the financial statements at the inception of the lease. Other leases are classified as operating
leases with the lease payments recorded as expenditures or expenses during the life of the lease.
N. FEDERAL FUNDS PURCHASED
Federal Funds Purchased represent federal funds borrowed by the Bank of North Dakota from member banks generally
on an overnight basis at the federal funds rate.
O. CLAIMS/JUDGMENTS PAYABLE
Claims/Judgments Payable is primarily Workers Compensation Claims Incurred But Not Yet Reported (IBNR) by the
claimants as well as claims related to various litigation matters.
P. COMPENSATED ABSENCES
ANNUAL LEAVE
State employees accrue vested annual leave at a variable rate based on years of service. Teachers employed by the State
do not receive annual leave. In general, accrued annual leave cannot exceed 30 days at each year end, as set by the
agency. The amount of annual leave earned ranges between one and two days per month, and is fixed by the employing
unit per section 54-06-14 of the NDCC.
The governmental fund financial statements recognize annual leave when the liability is incurred and payable from available
expendable resources. This normally occurs only if an employee has unused reimbursable leave still outstanding at the
time of their termination. The government-wide financial statements present the cost of accumulated annual leave as a
liability. Proprietary and Fiduciary Funds recognize the expense and accrued liability when the annual leave is earned.
SICK LEAVE
The North Dakota Century Code, section 54-06-14, states employees accrue sick leave at the rate of one to a maximum
of one and one-half working days per month of employment without limitation on the amount that can be accumulated.
Employees vest at ten years of creditable service, at which time the State is liable for ten percent of the employee's
accumulated unused sick leave. The governmental fund financial statements recognize sick leave as it is incurred. The
government-wide financial statements present the estimated cost of sick leave as a liability after an employee has been
employed by the State for five consecutive years.
Q. DEPOSITS
The following two liability line items are presented in the Government-wide Statement of Net Position and/or fund financial
statements:
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Deposits Held For Other Funds. "Deposits Held for Other Funds" are those deposits held by the Bank of North Dakota
for other funds included in the reporting entity and shown on the fund financial statements. For purposes of the
Government-wide Statement of Net Position, these amounts have been reclassified to internal balances.
Other Deposits. "Other Deposits" are those deposits held by the Bank of North Dakota for non-reporting entity third parties.
It also includes deposits held for students of the University System.
Differences on the fund balance sheets between the liability "Deposits Held for Other Funds" and the assets "Cash Deposits
and Investments at the Bank of North Dakota" are attributable to timing differences resulting from the Bank of North Dakota
having a different accounting year end than many other state agencies.
R. NET PENSION LIABILITY
For purposes of measuring the net pension liability and deferred outflows/inflows related to pension, and pension expense,
information about the fiduciary net position of the North Dakota Public Employee Retirement System (PERS), North Dakota
Highway Patrolmen’s Retirement System (NDHPRS), Retirement Plan for the Employees of Job Service North Dakota
(JSND) and North Dakota Teachers’ Fund for Retirement (TFFR) and additions to / deductions from PERS, NDHPRS,
JSND and TFFR’s fiduciary net position have been determined on the same basis as they are reported for PERS, NDHPRS,
JSND and TFFR. For this purpose, benefit payments (including refunds of employee contributions) are recognized when
due and payable in accordance with the benefit terms. The primary government’s proportionate share of pension amounts
were further reallocated to the propriety funds (business-type activities) based on the amount of employer contributions
paid by each proprietary fund. Pension investments are reported at fair value.
S. NET OTHER POST EMPLOYMENT BENEFITS LIABILITY
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related
to OPEB, and OPEB expense, information about the fiduciary net position of the North Dakota Public Employees
Retirement System (NDPERS) and additions to/deductions from NDPERS’ fiduciary net position have been determined on
the same basis as they are reported by NDPERS. For this purpose, benefit payments are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
Job Service North Dakota engaged an actuary to determine the net OPEB liability, deferred outflows of resources and
deferred inflow of resources related to OPEB and OPEB expense for its Met Life Insurance Benefit plan.
T. DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources represent an acquisition of net position that applies to a future period, and so will not be
recognized as an inflow of resources (revenue) until that time. Deferred inflows of resources are reported in the applicable
governmental or business-type activities columns or in the component units column on the government-wide Statement of
Net Position. Deferred inflows of resources of governmental funds, proprietary fund, and discrete component units are
reported in detail in their respective fund statements.
U. NET POSITION/FUND BALANCE
The difference between fund assets and liabilities is “Net Position” on the government-wide, proprietary, and fiduciary fund
statements, and “Fund Balance” on governmental fund statements.
CLASSIFICATIONS
Fund balance classifications for governmental funds are reported in two general classifications, nonspendable and
spendable. Nonspendable represents the portion of fund balance that is not in spendable form such as inventories and
prepaids. Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned.
The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by the
State constitution and external parties, such as the federal government, or through enabling legislation.
The committed fund balance classification includes amounts that can be used only for the specific purposes determined
by a formal action of the government’s highest level of decision-making authority, the state’s legislature, through legislation,
that is not considered as enabling legislation, passed into law.
Assigned fund balance classifications are used when the amounts are to be used for specific purposes but do not meet
the criteria to be classified as restricted or committed. The assignment of fund balance is generally initiated by the executive
branch and later appropriated by the Legislature for a specific purpose. In governmental funds other than the general fund,
assigned fund balance also represents the remaining amount that is not restricted or committed.
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Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable
amounts not contained in the other classifications. In other funds, the unassigned classification would only be used to
report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted,
committed, or assigned.
The State generally segregates restricted, committed, and assigned resources by individual funds within the governmental
funds. When resources meeting more than one of these classifications are comingled within an individual fund, the
assumed order of spending is restricted first, committed second, assigned third, and finally, unassigned.
BUDGET STABILIZATION FUND
North Dakota Century Code (NDCC) section 54-27.2-02 requires any amount in the state general fund in excess of sixty-
five million dollars at the end of any biennium to be deposited in the Budget Stabilization Fund. Any interest or earnings of
the fund must be deposited in the fund per NDCC section 54-27.2-01. However, any amounts provided by law for deposit
in the fund and any interest or earning of the fund which would bring the balance in the fund to an amount greater than
fifteen percent of the current biennial state general fund budget, as finally approved by the most recently adjourned special
or regular session of the legislative assembly, may not be deposited or retained in the fund but must be deposited instead
in the state general fund.
NDCC section 54-27.2-03 states that if general fund revenue projections for the biennium will be at least two and one-half
percent less than estimated by the most recently adjourned special or regular session of the legislative assembly, and if
the governor orders a transfer, which must be reported to the budget section of the legislative management, the state
treasurer shall transfer the appropriate funds from the budget stabilization fund to the state general fund to offset the
decrease in general fund revenues. The amount transferred upon order of the governor may not exceed the difference
between an amount two and on-half percent below the general fund revenue projections for the biennium. The Budget
Stabilization Fund, fund balance at June 30, 2020 was $726,903,611.
V. REVENUES AND EXPENDITURES/EXPENSES
In the Government-wide Statement of Activities, revenues and expenses are segregated by activity (governmental or
business-type), then further by function for governmental activities (e.g., general government, education, health and human
services, etc.). Additionally, revenues are classified between program and general revenues. Program revenues include
1) charges to customers or applicants for goods or services, 2) operating grants and contributions, and 3) capital grants
and contributions. Internally dedicated resources are reported as general revenues, rather than as program revenue.
General revenues include all taxes and money from tobacco settlements. Certain indirect costs are included in the program
expenses reported for individual functions.
In the government-wide financial statements, revenues are reported by source and are further classified as either “general
purpose” or “restricted”. General purpose revenues are available to fund any activity accounted for in the fund. Restricted
revenues are, either by State law or by outside restriction (e.g., federal grants), available only for specified purposes. When
both general purpose and restricted funds are available for use, it is the State’s policy to use restricted resources first. In
the governmental fund financial statements, expenditures are reported by character: “Current,” “Intergovernmental-revenue
Sharing,” “Capital Outlay,” or “Debt Service.” Current expenditures are sub-classified by function and are for items such as
salaries, grants, supplies, and services.
Capital outlay includes expenditures for real property or infrastructure (e.g., highways). Intergovernmental-revenue sharing
accounts for the distribution of certain tax revenues that are shared with local units based upon constitutional and statutory
requirements. Debt service includes both interest and principal outlays related to bonds and payments on capitalized
leases.
Revenues and expenses of proprietary funds are classified as operating or nonoperating and are sub classified by object
(e.g., salaries, depreciation, and purchases for resale). Operating revenues consist of sales of goods and services, quasi-
external operating transactions with other funds, grant revenues for specific activities that are considered to be operating
activities of the grantor, receipts from other agencies for reimbursement of operating transactions, and other miscellaneous
revenue that should be classified as operating. Grants that would qualify as an operating activity are those that do not
subsidize an existing program, rather they finance a program the agency would otherwise not undertake. For certain loan
and investment programs, revenue that would normally be classified as non-operating should be classified as operating.
Examples of this would include interest and investment income. All other revenues that do not meet the above criteria
should be classified as non-operating.
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W. ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - RESTATEMENTS
The changes to beginning net position are summarized in the following table (expressed in thousands):
Component Units
(FASB Based)
Government-wide Component Units State Historical
Gov’t Activities (GASB Based) Society Foundation
June 30, 2019, net position, as previously
reported $ 20,612,163 $ 549,583 $ -
Prior period adjustments:
Correction of Errors (1,092) (1,079) 1,079
June 30, 2019, net position, as restated $ 20,611,071 $ 548,504 $ 1,079
A. CORRECTION OF ERRORS
The beginning net position of the Government-wide governmental activities were restated due to an overstatement of
construction in progress of $1.092 million. The Component Units (GASB Based) net position was reduced $1.079 million
to reclassify the State Historical Society of North Dakota Foundation from the GASB component units to the FASB
component units statements, as the Foundation is accounted for under the FASB basis.
NOTE 3 - DETAILED NOTES ON ACCOUNT BALANCES
A. DEPOSITS
CUSTODIAL CREDIT RISK
The State minimizes custodial credit risk by restrictions set forth in state statute. Custodial credit risk is risk associated with
the failure of a depository financial institution. In the event of a depository financial institution’s failure, the State would not
be able to recover its deposits or collateralized securities that are in the possession of the outside parties.
State law generally requires that all State funds be deposited in the Bank of North Dakota. NDCC 21-04-01 provides that
public funds belonging to or in the custody of the State shall be deposited in the Bank of North Dakota. Also, NDCC 6-09-07
states, “all state funds . . . must be deposited in the Bank of North Dakota” or must be deposited in accordance with
constitutional and statutory provisions. The State does not have a formal policy that addresses custodial credit risk for
deposits.
At June 30, 2020, the bank balance of the primary government’s deposits was $444,521,116. Of the bank amount,
$196,738,000 was uncollateralized and uninsured.
There were significant concentrations of uninsured and uncollateralized deposits in the Bank of North Dakota and University
System at June 30, 2020. Their uninsured and uncollateralized deposits totaled $196.7 million and $789 thousand, and
their bank deposits totaled $198.3 million and $18.3 million, respectively.
At June 30, 2020, the bank balance of the major component units’ deposits was $104,790,495. Of the bank amount,
$103,233,156 was uncollateralized and uninsured.
The internal receivable amount in the governmental activities column in the Statement of Net Position includes Cash and
Investments at the Bank of North Dakota for governmental activities. The internal payable amount in the business-type
activities column includes deposits the Bank has for governmental activities. Because the Bank has a different fiscal year
end, these internal balances do not equal.
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B. INVESTMENTS
The investment policies of the State of North Dakota are governed by NDCC 6-09-07, 15-10-12, and 21-04-02, indicating
that all public funds must be deposited in the Bank of North Dakota unless there are other constitutional or statutory
provisions. If there are no statutory provisions and the funds are invested outside the Bank of North Dakota, the state
agency must have the permission of the North Dakota Industrial Commission.
Investments are generally managed by the State Investment Board, the North Dakota Department of Trust Lands, the Bank
of North Dakota, and the North Dakota State Treasurer’s Office. Management responsibilities and investment instruments
as authorized by statute are as follows:
1. State Investment Board (SIB) – NDCC 21-10 designates the SIB with investment responsibilities for the Public
Employees’ Retirement System, Bonding Fund, Teachers’ Fund for Retirement, Fire and Tornado Fund, Workforce
Safety & Insurance Fund, and other specific funds. The Century Code states the SIB shall apply the prudent investor
rule in investing funds under its supervision. The retirement funds belonging to the teachers’ fund for retirement and
the public employees’ retirement system must be invested exclusively for the benefit of their members and in
accordance with the respective funds’ investment goals and objectives.
The State Investment Board’s investment policy allows investment managers to use derivative securities to hedge or
replicate underlying exposures but not for speculation. All derivatives are considered investment derivative
investments. The SIB had four types of derivative securities at June 30, 2020: futures, options, swaps and currency
forwards.
2. North Dakota Department of Trust Lands – The Century Code states that the Department of Trust Lands shall apply
the prudent investor rule in investing its funds. The investment policies of the Board allow the use of derivative
securities to hedge or replicate underlying exposures but not for speculation. All derivatives are considered
investment derivative investments.
3. The Bank of North Dakota – NDCC 6-09 authorizes the Bank of North Dakota. The Bank is owned and operated by
the State of North Dakota under the supervision of the North Dakota Industrial Commission. The Bank may have
investments in anything that any bank lawfully may do, except what is restricted by NDCC 6-09.
4. The North Dakota State Treasurer’s Office – The North Dakota Constitution and various sections of the Century Code
authorize the State Treasurer to invest all State funds deposited with the State Treasury. However, the State
Treasurer must invest the public funds with the Bank of North Dakota unless there is statutory authority to do
otherwise. Generally, the State Treasurer pools deposits and invests in money market accounts and Bank of North
Dakota certificates of deposit.
5. University System – NDCC 15-55-05 and 15-55-06 govern the investment of proceeds of revenue bonds and
revenues pledged to bondholders. Such proceeds must be invested in the Bank of North Dakota, in a separate fund
in the State Treasury or in a duly authorized depository for the state funds that is a member of the federal deposit
insurance corporation. The University System may invest such funds in direct obligation of, or in obligations where
the United States of America guarantees the principal and interest, or obligations of the State of North Dakota or any
municipality as defined in NDCC Section 21-03-01.
Agency investments, of the primary government, under management of the State Investment Board are included below
with the Pension and Investment Trust funds.
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INTEREST RATE RISK
Interest rate risk is the risk that changes in interest rates of debt securities will adversely affect the fair value of an
investment. The price of a debt security typically moves in the opposite direction of the change in interest rates. The State
does not have a formal investment policy that limits investment maturities as a means of managing its exposure to potential
fair value losses arising from future changes in interest rates. However, North Dakota Housing Finance’s respective bond
resolutions permit only investments that will not adversely affect the rating quality of the outstanding bonds. Also, the
maturity date or the date on which such investment obligations may be redeemed shall coincide as nearly as practicable
with the date or dates on which moneys in the funds or accounts for which the investments were made will be required.
The Bank of North Dakota’s investment policy provides for a duration range of one to four years, which will serve to
decrease interest rate risk.
At June 30, 2020, the following tables show the debt securities of the primary government and major component units by
investment type and maturity (expressed in thousands).
Primary Government (includes Pension and Investment Trust Funds)
Total Fair Less Than More Than
Investment Type Value 1 Year 1 - 6 Years 6 - 10 Years 10 Years
Asset Backed Securities $ 589,018 $ 104 $ 122,916 $ 224,913 $ 241,085
Collateralized Bonds 4,629 - - 217 4,412
Commercial Mortgage-Backed 1,469,713 2,588 1,147,870 9,476 309,779
Commercial Paper 33,978 33,978 - - -
Corporate Bonds 2,594,421 77,669 1,506,387 519,710 490,655
Corporate Convertible Bonds 10,372 - 4,709 1,825 3,838
Government Agencies 1,325,176 2,104 1,123,729 14,240 185,103
Government Bonds 744,158 8,206 225,629 260,951 249,372
Government Issued CMB 62,317 - 7,526 36,243 18,548
Government Mortgage-Backed 1,038,933 6 6,682 40,851 991,394
Index-Linked Government Bonds 741,322 - 273,179 235,025 233,118
Municipal/Provincial Bonds 74,929 3,299 39,190 6,448 25,992
Non-Government-Backed CMOs 154,304 - 2,745 7,555 144,004
Short Term Bills and Notes 83,048 83,048 - - -
Pooled Investments 1,562,242 27,553 1,029,329 253,684 251,676
Total Debt Securities $ 10,488,560 $ 238,555 $ 5,489,891 $ 1,611,138 $ 3,148,976
Major Component Units
Total Fair Less Than More Than
Investment Type Value 1 Year 1 - 6 Years 6 - 10 Years 10 Years
Commercial Paper $ 4,799 $ 4,799 $ - $ - $ -
Corporate Notes 17,868 13,321 4,547 - -
Government Agencies 8,445 4,871 3,574 - -
Government Bonds 30,239 15,614 14,625 - -
Short Term Bills and Notes 11,916 11,916 - - -
Total Debt Securities $ 73,267 $ 50,521 $ 22,746 $ - $ -
The fair values of inflation indexed bonds are reflected in the tables above, based on their stated maturity dates. The
principal balances of these bonds are adjusted every six months based on the inflation index for that period.
Some investments are more sensitive to interest rate changes than others. Variable and floating rate collateralized
mortgage obligations (CMO’s), asset-backed securities (ABS), interest-only and principal-only securities are examples of
investments whose fair values may be highly sensitive to interest rate changes.
Interest-only (IO) and principal-only (PO) strips are transactions which involve the separation of the interest and principal
components of a security. They are highly sensitive to prepayments by mortgagors, which may result from a decline in
interest rates. The State held no PO’s and held IOs valued at $24.4 million. The State has no policy regarding IO or PO
strips.
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CONCENTRATION OF CREDIT RISK
Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer.
The State does not have an investment policy that specifically addresses concentrations of credit risk in a single issuer,
however the Bank of North Dakota has established asset allocation ranges for investments as a percentage of their total
portfolio.
The Bank of North Dakota had the following concentrations at June 30, 2020 (expressed in thousands):
Amount Percent
Federal Agency
Federal Home Loan Bank $ 244,471 12.3%
Small Business Administration 221,472 11.2%
Farm Credit 346,450 17.5%
Freddie Mac 30,079 1.5%
Fannie Mae 65,192 3.3%
Mortgage-backed
Fannie Mae 626,574 31.6%
Freddie Mac 391,742 19.8%
Others less than 5% 56,487 2.8%
$ 1,982,467 100.0%
CREDIT RISK
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The State maintains
a highly diversified portfolio of debt securities encompassing a wide range of credit ratings. Although the State has no
overall policy regarding credit risk, each debt securities manager is given a specific set of guidelines to invest within based
on the mandate for which it was hired. The guidelines specify in which range of credit the manager may invest. These
ranges include investment grade and below investment grade categories. The Bank of North Dakota’s investment policy
provides minimum credit quality ratings for its investments and asset allocation ranges for investments as a percentage of
the total portfolio.
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As of June 30, 2020, the following tables present the debt securities of the primary government and major component units
and their respective ratings (expressed in thousands).
Primary Government (includes Pension and Investment Trust Funds) S&P Credit Rating*
Total Not
Fair Value AAA AA A BBB BB B CCC
-CC C
---- D
--- - -Rated
---
Asset Backed
Securities $589,018 $304,991 $63,388 $44,998 $53,475 $7,508 $1,424 $6,123 $1,707 $ - $1,102 $104,302
Collateralized
Bonds 4,629 2,633 - - - - - - - - - 1,996
Commercial
Mortgage-Backed 1,342,022 1,249,542 7,606 9,032 7,509 3,243 4,082 1,685 - - - 59,323
Commercial
Paper 33,978 - - - - - - - - - - 33,978
Corporate Bonds 2,594,484 17,276 142,871 827,216 1,271,177 217,674 74,559 27,311 286 1,105 485 14,524
Corporate
Convertible Bonds 10,372 - - 175 915 2,635 923 2,639 - - 20 3,065
Government
Agencies 1,126,216 964,702 134,804 9,712 15,581 - - 1,417 - - - -
Government
Bonds 138,680 2,479 10,350 1,725 61,137 34,417 10,249 - 3,286 - 921 14,116
Government
Mortgage Backed 728,275 - 711,156 1,023 5,240 - 8,463 - - - - 2,393
Government
Issued CMB 46,648 2,044 44,604 - - - - - - - - -
Municipal/
Provincial Bonds 73,940 8,156 34,144 18,328 4,206 1,866 - - 481 - 634 6,125
Non-Government
Backed CMOs 154,305 39,374 10,663 15,644 16,227 2,154 2,049 1,991 1,168 - 152 64,883
Short-Term
Investment Funds 186,988 - 6,098 - - - - - - - - 180,890
Pooled
Investments 1,781,834 380,144 247,731 656,131 116,280 18,038 26,709 -
- - -- - - -- - - -- -336,801
---
Total Credit Risk
Debt Securities 8,811,389 $2,971,341 $1,413,415 $1,583,984 $1,551,747 $287,535 $128,458 $41,166 $6,928 $1,105 $3,314 $822,396
=======
US Gov’t &
Agencies** 1,627,559
Mutual Funds 230,607
Total Debt
Securities $10,669,555
73
STATE OF NORTH DAKOTA
Major Component Units
Total
Fair Value AA A BBB
Commercial Paper $ 4,799 $ - $ 4,799 $ -
Short Term Bills & Notes 11,916 - 11,916 -
Government Agencies 8,445 8,445 - -
Corporate Notes 17,868 631 14,148 3,089
Total Credit Risk Debt Securities 43,028 $ 9,076 $ 30,863 $ 3,089
US Gov’t & Agencies 30,239
Total Debt Securities $ 73,267
*Ratings are determined in the following order: 1) S&P rating, 2) Moody’s rating, 3) Fitch rating, 4) Manager-determined
rating (internal rating) and 5) if no ratings are available using steps 1-4, then shown as not rated.
**US government agency securities explicitly guaranteed by the US government are categorized here. Credit ratings of US
government agency securities that are only implicitly guaranteed by the US government are categorized accordingly in the
main body of this table. Implicitly guaranteed agency securities included in the Asset Backed, Commercial Mortgage
Backed, Gov’t Issued Commercial & Gov’t Mortgage Backed, Gov’t Agencies, Gov’t Bonds, Index Linked Gov’t Bonds and
Short Term Bills and Notes categories are issued by FNMA, FHLB, FHLMC, FAMC and TVA.
FOREIGN CURRENCY RISK
Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or a
deposit. Although the State Investment Board does not have a formal investment policy governing foreign currency risk,
the board does manage its exposure to fair value loss by requiring their international securities investment managers to
maintain diversified portfolios to limit foreign currency and security risk. The Department of Trust Lands treats currency
exposure in two different ways, depending on the type of investment. For the Board’s international equity portfolio, the
currency exposure is not hedged, as currency exposure is one of the items that adds diversity to the overall portfolio. For
foreign bonds, the Board fully hedges the currency exposure, as the purpose of this portfolio is to generate more consistent
returns.
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STATE OF NORTH DAKOTA
At June 30, 2020, foreign currency risk exposure on investments managed by the Department of Trust Lands and State
Investment Board were as follows (expressed in thousands).
Primary Government (includes Pension and Investment Trust Funds)
Currency Short-Term Debt Equity Real Estate Total
Argentine peso $ 205 $ 416 $ - $ - $ 621
Australian dollar (453) 1,223 111,338 - 112,108
Brazilian real 458 6,357 12,581 - 19,396
British pound sterling (25,312) 45,405 336,997 - 357,090
Canadian dollar (690) 2,269 91,259 - 92,838
Chilean peso - 8,666 791 - 9,457
Chinese yuan renminbi 278 - 5,612 - 5,890
Columbian peso 452 8,022 219 - 8,693
Czech koruna - 7,109 716 - 7,825
Danish krone 64 - 87,564 - 87,628
Egyptian pound - - 67 - 67
Euro (30,138) 53,910 665,166 613 689,551
Hong Kong dollar 138 - 211,749 - 212,787
Hungarian forint 243 7,127 2,436 - 9,806
Indian rupee - - 13,013 - 13,013
Indonesian rupiah 55 394 7,867 - 8,316
Israeli shekel - - 4,453 - 4,453
Japanese yen 2,616 - 473,961 - 476,577
Kenyan shiling - - 1,213 - 1,213
Malaysian ringgit 203 8,667 2,276 - 11,146
Mexican peso (24) 20,270 5,326 - 25,572
New Israeli shekel - - 3,463 - 3,463
New Taiwan dollar 23 - 8,138 - 8,161
New Zealand dollar 101 1,665 2,126 - 3,892
Norwegian krone 133 128 15,223 - 15,484
Peruvian neuvo sol - - 10 - 10
Philippine peso - - 971 - 971
Polish zloty (47) 9,741 943 - 10,637
Qatari riyal - - 86 86
Russian ruble (52) 2,256 1,171 - 3,375
Saudi Arabian riyal - - 886 886
Singapore dollar 276 - 17,330 - 17,606
South African rand 1,098 412 6,235 - 7,745
South Korean won - 9,078 28,524 - 37,602
Swedish krona 37 - 100,280 - 100,317
Swiss franc 1,618 - 208,642 - 210,260
Taiwan dollar - - 24,638 - 24,638
Thai baht - - 6,401 - 6,401
Turkish lira - - 791 - 791
UAE dirham - - 57 57
International commingled
funds (various currencies) - - 980,048 35,004 1,015,052
Total international investment securities $ (47,818) $ 193,115 $ 3,440,567 $ 35,617 $ 3,621,481
75
STATE OF NORTH DAKOTA
Derivative Securities – Derivatives are financial arrangements between two parties whose payments are based on, or
“derived” from, the performance of some agreed upon benchmark. The investment policies of the States’ clients allow the
use of derivative securities to hedge or replicate underlying exposures but not for speculation. All derivatives are considered
investment derivative instruments. The fair value of all derivative securities is reported in the Statement of Net Position. At
June 30, 2020, the State had four types of derivative securities: futures, options, swaps and currency forwards.
Futures – Futures represent commitments to purchase (asset) or sell (liability) securities at a future date and at a specific
price. Futures contracts are traded on organized exchanges (exchange traded) thereby minimizing the States’ counterparty
risk. The net change in the futures contracts’ value is settled daily in cash with the exchanges. Net gains or losses resulting
from the daily settlements are included in net change in fair value of investments in the Statement of Changes in Fiduciary
Net Position and totaled $65.4 million for the year ended June 30, 2020. At June 30, 2020, the State investment portfolio
had the notional futures shown below (expressed in thousands).
Futures Notional Value
Cash and cash equivalent derivative futures
Long $ -
Short (258,482)
Equity derivative futures
Long 1,064,665
Short -
Fixed income derivative futures
Long 262,374
Short (1,703,654)
Total futures $ (635,097)
Options – Options represent or give buyers the right, but not the obligation, to buy (call) or sell (put) an asset at a preset
price over a specified period. Options are traded on organized exchanges (exchange traded) thereby minimizing the States’
counterparty credit risk. The option’s price is usually a small percentage of the underlying asset’s value. As a seller of a
financial option, the State, through its investment manager, receives a premium at the beginning of the agreement and
bears the risk of an unfavorable change in the price of the financial instrument underlying the option. As a buyer of a
financial option, the State, through its investment manager, pays a premium at the beginning of the agreement and the
counterparty bears the risk of an unfavorable change in the price of the financial instrument underlying the option. Gains
and losses on options are determined based on fair values and recorded with the net change in fair value of investments
in the Statement of Changes in Fiduciary Net Position and totaled $5.3 million. At June 30, 2020, the State had the following
option balances (expressed in thousands):
Options Fair Value
Cash & Other Options
Call $ 201
Put 537
Fixed Income Options
Call (146)
Put (70)
Total options $ 522
Swaps – A swap is a derivative in which counterparties exchange certain benefits of one party’s financial instrument for
those of the other party’s financial instrument. Specifically, the two counterparties agree to exchange one stream of cash
flows for another stream. The State, through its investment managers, has entered into various swap agreements in an
attempt to manage its exposure to interest rate, inflation, credit, currency risk and total return.
Gains and losses on swaps are determined based on fair values and are recorded with the net change in fair value of
investments in the Statement of Changes in Fiduciary Net Position and totaled $(22.5) million for the year ended June 30,
2020. The maximum loss that would be recognized at June 30, 2020, if all counterparties failed to perform as contracted
is $3.0 million. Swap fair values are determined by a third party pricing source.
76
STATE OF NORTH DAKOTA
At June 30, 2020, the States’ investment portfolio had the swap fair value balances as shown below (expressed in
thousands).
Credit Default Swaps
Counterparty/Moody’s Rating Notional Amount Expiration Date Fair Value
Bank of America / Aa2 (5 contracts) $ (3,730) 2021 - 2025 $ (71)
Citibank / Aa3 (34 contracts) 3,715 2020 - 2024 (262)
Citigroup Global Markets / A1 (2 contracts) (400) 2024 (9)
Credit Suisse First Boston / A1 (9 contracts) (3,675) 2020 - 2024 (114)
Deutsche Bank / A3 (2 contracts) 2,000 2059 (15)
Goldman Sachs / A3 (4 contracts) (1,700) 2023 - 2024 (55)
JP Morgan Chase / Aa2 (4 contracts) (25,515) 2025 - 2029 852
Morgan Stanley / A3 (5 contracts) 2,555 2024 - 2025 (35)
Total credit default swaps $ (26,750) $ 291
Interest Rate Swaps
Expiration Date
Counterparty/Moody’s Rating Notional Amount Range Fair Value
Citigroup Global Markets / A1 (16 contracts) $ 112,251 2020 - 2050 $ 443
Credit Suisse First Boston / A1 (22 contracts) 185,220 2020 - 2050 714
JP Morgan Chase / Aa2 (100 contracts) 367,049 2020 - 2045 4,871
Total Interest Rate Swaps $ 664,520 $ 6,028
Total Return Swaps
Counterparty/Moody’s Rating Notional Amount Expiration Date Fair Value
Credit Suisse International / A1 (2 contracts) $ 2,764 2041 $ 2
Total Return Swaps $ 2,764 $ 2
Currency Forwards – Currency forwards represent forward exchange contracts that are entered into in order to manage
the exposure to changes in currency exchange rates on the currency denominated portfolio holdings. A forward exchange
contract is a commitment to purchase (positive) or sell (negative) a currency at a future date at a negotiated forward rate.
The gain or loss arising from the difference between the original contracts and the closing of such contracts is included in
the net change in fair value of investments in the Statement of Changes in Fiduciary Net Position and totaled $2.0 million.
At June 30, 2020, the States’ investment portfolio included the currency forwards balances shown below (expressed in
thousands).
Currency Cost Purchases Sales Fair Value
Australian dollar $ (722) $ - $ (722) $ (737)
Brazilian real 2 20 (18) (2)
British pound sterling (39,156) 4,970 (44,126) (39,408)
Canadian dollar (569) - (569) (579)
Columbian peso 174 174 - 167
Euro (59,294) 41,056 (100,350) (60,502)
Russian ruble (136) 1,216 (1,352) (52)
United States dollar 99,701 147,137 (47,436) 99,701
Total forwards subject to currency risk $ (1,412)
77
STATE OF NORTH DAKOTA
Derivative Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the value of
an interest rate-based derivative investment. The State does not have a formal investment policy regarding such derivative
investments. At June 30, 2020, the tables below show the States’ derivative investments subject to interest rate risk
(expressed in thousands).
Total Greater
Notional 3 Months or 6 to 12 Than
Value Less 3 to 6 Months Months 1-5 Years 5 Years
Futures-
interest
rate
contracts $ (1,699,762) $ (265,954) $ (1,175,326) $ (86,077) $ (172,405) $ -
Margined
Options -
interest
rate
contracts (3) (3) - - - -
Total $ (1,699,765) $ (265,957) $ (1,175,326) $ (86,077) $ (172,405) $ -
Greater
Than
Total Fair 3 Months 3 to 6 6 to 12 1-5 5-10 10
Value or Less Months Months Years Years Years
Options -
Interest rate
contracts $ 731 $ (7) $ - $ - $ - $ - $ 738
Options on
futures (209) (209) - - - - -
Swaps -
interest
rate
contracts 6,028 7 (2) 472 5,826 250 (525)
Swaps -
credit
contracts 291 - (3) - 396 (87) (15)
Total $ 6,841 $ (209) $ (5) $ 472 $ 6,222 $ 163 $ 198
Mill and Elevator Derivative Financial Instruments – The fair value balances and notional amounts of derivative
instruments outstanding at June 30, 2020, and the changes in fair value of such derivative instruments for the year then
ended as reported in the State’s financial statements are $735,025, classified as derivative instrument (one contract equals
5,000 bushels) and $735,025, classified as deferred inflow of resources – accumulated increase in fair value of hedging
derivatives. The fair value of the grain futures contracts was determined on the Minneapolis Grain Exchange. The margin
requirement is $0.60 per bushel, unless the market price changes the limit for two consecutive days, then the margin
requirement is $0.90 per bushel. The Mill has entered into futures contracts for spring wheat to lock in a price for a future
delivery or settlement period. These contracts are entered into to protect the Mill against price fluctuation of the commodity.
The price protection is needed to cover any long or short positions compared to flour sales. The table below shows the
cost and market values of these spring wheat futures as of June 30, 2020.
Number of Average
Month Contracts Cost Fair Value Average Cost Market Value
Sept 2020 275 $ 5.4175 $ 5.2025 $ 7,450,163 $ 7,153,438
Dec 2020 319 5.5250 5.3350 8,816,463 8,509,325
Mar 2021 130 5.6424 5.4700 3,686,663 3,555,500
$ 19,953,289 $ 19,218,263
The Mill is exposed to credit risk on hedging derivative instruments that are in asset positions. All grain futures trades are
completed using two different national brokerage firms on the Minneapolis Grain Exchange. ADM Investor Services is rated
A by the Standard & Poor’s Rating Service. RJ O’Brien is a privately held business and is not rated by the Standard &
Poor’s Rating Service.
78
STATE OF NORTH DAKOTA
The Mill is exposed to rollover risk on grain futures trades whenever the hedge ration (defined in aggregate of the size
across all futures months relative to the underlying net cash position) does not equal 1.0. At June 30, 2020, the table below
shows the hedge ratio by futures month going forward:
Period Hedge Ratio
Sept 2020 1.0
Dec 2020 1.1
March 2021 1.0
Net Position 1.1
C. SECURITIES LENDING
The following represents the balances relating to the securities lending transactions at June 30, 2020 (expressed in
thousands).
Primary Government (includes Pension and Investment Trust Funds)
Underlying Non-Cash Cash Collateral
Securities Lent Securities Collateral Value Investment Value
Lent for cash collateral:
US agency securities $ 11,977 $ 5,954 $ 12,222
US government securities 150,111 18,498 153,276
US corporate fixed income securities 38,791 - 39,470
US equities 31,478 2,242 32,001
Global government fixed income securities 205 - 214
Global government securities 827 - 875
Global equities 29,051 116 31,010
Lent for non-cash collateral:
Market value of securities on loan against
non-cash collateral 145,780 121,679 -
Total $ 408,220 $ 148,489 $ 269,068
D. ENDOWMENT FUNDS
UNIVERSITY SYSTEMS
The endowment funds reported herein are institutional funds under the terms of the gift instrument and are not wholly
expendable by the institution. NDCC Section 59-21, the Uniform Prudent Management of Institutional Funds Act (UPMIFA)
applies to the investment of endowments governed by a gift instrument. NDUS SBHE policy 810 stipulates endowment
funds shall be invested according to the intent of the donor provided such intent is consistent with applicable laws. Absent
terms expressing donor intent in a gift instrument, NDUS institution officers initially shall deposit the funds in institution
accounts at the Bank of North Dakota. Thereafter, the funds may be invested according to NDCC 59-21. Subject to the
intent of the donor, NDUS institution officers are delegated authority to manage and invest these institutional funds as
provided by UPMIFA. NDCC Section 59-21-02.5a(7) applies to standard of conduct in the administration of powers to make
and retain investments. It states that in managing and investing an institutional fund, the needs of the institution and the
fund to make distributions and to preserve capital must be considered. Given the flexibility in NDCC 59-21-02, institutions
have differing policies with respect to spending investment income and net appreciation on endowment funds. For UND,
distributions for spending endowments each year will be calculated once annually with the quarter ended December 31
unitized market value and is based on the set spending rate, currently four percent, applied to the average market value
for the preceding twelve quarter average. All endowment in existence at December 31 for one year will receive a distribution
spending allocation. The available amount will be forecast to UND for planning purposes by February 1, and these
distributions will be available for spending in the upcoming fiscal year. NDSU determines the spending of endowment
earnings based on an annual evaluation. WSC give departments authority to spend all investment income earned on the
endowment funds.
79
STATE OF NORTH DAKOTA
Net appreciation on investments are available for expenditure and consist of the following at June 30, 2020:
Reflected in net position as:
North Dakota State University $ 294,201 Expendable scholarships & fellowships
University of North Dakota 911,679 Non-expendable scholarships & fellowships
Williston State College 4,217 Non-expendable scholarships & fellowships
Total NDUS $ 1,210,097
Endowment funds reported herein do not include the Federal Land Grant Fund held by the State Department of Trust
Lands. The annual proceeds from assets held by the Commissioner of the State Department of Trust Lands and are
deposited into each college/university’s operating fund at the State Treasury and are used for current operating purposes.
Bismarck State College, Lake Region State College and Williston State College do not participate in the proceeds allocated
by the State Land Department. Total assets held by the State Land Department and proceeds for the fiscal year ended
June 30, 2020 are approximately $184.6 million and $7.3 million respectively.
NORTH DAKOTA STATE FAIR FOUNDATION
The North Dakota State Fair Association Foundation had the following activity in their endowment as of September 30,
2019.
Beginning endowment $ 2,155,492
Endowment contributions -
Ending endowment $ 2,155,492
E. RECEIVABLES
Receivables at June 30, 2020, consist of the following (expressed in thousands):
Other
Governmental Bank of North Housing
General Federal State Funds Dakota Finance
Receivables:
Accounts $ 26,906 $ 48,860 $ 117,371 $ 9 $ - $ 666
Less Allowance (10,120) (18,244) (36,474) - - -
Taxes 533,784 - 83,515 108 - -
Less Allowance (138,550) - (3,263) - - -
Interest 29,512 - 27,014 83 56,672 5,176
Less Allowance - - (9,127) - - -
Intergovernmental 755 285,351 11,085 - - 232
Less Allowance - - - - - -
Current Loans and Notes - - 12,060 49,634 852,400 30,160
Less Allowance - - (646) - - -
Noncurrent Loans and Notes 48 234 124,287 - 3,603,246 1,255,924
Less Allowance - - - - (95,690) -
Net Receivables $ 442,335 $ 316,201 $ 325,822 $ 49,834 $ 4,416,628 $ 1,292,158
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