North Dakota's Senate has gutted a proposal to restore the governor's control of the state's workers compensation agency, despite pleas that its current structure lacks accountability to injured workers.

For a decade, an independent board has been responsible for overseeing the operations of the Workforce Safety and Insurance agency, after the Legislature approved a bill to strip former Gov. Ed Schafer of his power to hire its director. Lawmakers overrode Schafer's veto in the process.

Legislation sponsored by Sen. Joel Heitkamp, D-Hankinson, sought to restore the governor's authority over workers compensation and remake the board into an advisory panel. Among its supporters was Schafer, who testified in its favor at a Senate committee hearing.

On Tuesday, the Senate voted to rewrite the bill to keep the independent board while putting North Dakota's agriculture commissioner, attorney general and insurance commissioner in charge of screening candidates.

Under current law, the WSI board itself submits names of potential board appointees to the governor, who must choose one when filling vacancies. Senators voted 24-22 to change the Heitkamp's bill, then voted 25-21 to endorse the legislation itself.

Heitkamp called the amendments meaningless.

"What we're doing is, we're not doing anything," he said. "We're creating another layer of government."

Sen. Nick Hacker, R-Grand Forks, said he supported the board, but said the process of selecting its members needed to be overhauled.

"The board is a sound concept, but has a flawed design," Hacker said. "The board, over time, becomes a self-revolving problem."

Before Tuesday's vote, Heitkamp distributed copies of an unflattering state audit of the Workforce Safety and Insurance agency's operations, which was published last November.

It said WSI often ignored state budget rules on purchase contracts, did not solicit competitive bids for some large purchases, and hired workers who did not meet minimum job qualifications. The agency has pervasive morale problems, the audit said.

When an employee used a computer in Mandan's public library to anonymously e-mail information about WSI employees' salaries, two agency fraud investigators visited the library with driver's license photos to try to discover the person's identity. The investigators also checked the Bismarck and Mandan post offices.

North Dakota's Highway Patrol is following up on the audit's findings to see if any laws were broken.

During Senate debate Tuesday, Sen. Arthur Behm, D-Niagara, denounced what he called the "Gestapo tactics" of WSI, calling the audit "absolutely devastating."

"If that didn't change your mind, then I don't know what would," Behm said.

Sen. Tracy Potter, D-Bismarck, said he didn't recall "ever seeing an audit of a state agency that was more troubling."