December 19, 2019

State error messes with school budget

By Jerry W. Kram
The New Town School District will have to refigure its budget because of an overpayment in the money the district receives as oil production royalties. However, the problem will not affect current operations and construction in the district.
According to School Superintendent Marc Bluestone, the North Dakota Department of Public Instruction has stopped payment of about $12.4 million in Foundation Aid to the district and has demanded the return of $5.7 million the school has already received. Bluestone believes the repayment can be negotiated lower by a million or two dollars.
The cause of the problem was an overpayment of royalties to the district of what is call U.S. Flood Money, which come from royalties collected from oil production under Lake Sakakawea. A portion of that money goes to local governments including Mountrail County and the New Town School District.
Bluestone said that the usual monthly payment is between $1 and $2 million but in February of this year, the district received an $8 million payment. The error was discovered and was resolved by withholding the district’s payments for July through September.
The problem with the state comes because like every other school in North Dakota, New Town School’s fiscal year runs from July to June. So the overpayment occurred in in the 2018-2019 school year but it wasn’t resolved until the 2019-2020 school year. That inflated the district’s ending fund balance for last year by about $6 million.

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