BISMARCK – Gov. Jack Dalrymple on Thursday directed the head of the state's Department of Trust Lands to make dozens of changes recommended in recent critical audits, whether the agency agrees with them or not.
Dalrymple and the other four members of the state Board of University and School Lands, which oversees the department, met with Land Commissioner Lance Gaebe to discuss his plan to address 59 recommendations made by the state auditor's office in three separate audits that found bookkeeping errors, raised ethical concerns and identified shortcomings in how the agency handled the state's oil impact grant and unclaimed property programs.
"I'm assuming that you're responding to every single one of them. I think you should," Dalrymple said.
Gaebe said it's "a big task" and noted that the department disagreed with some of the recommendations.
"That's irrelevant," Dalrymple said. "Whether you disagree with it or not, I've looked through it and ... I think you need to take their recommendations and make those changes."
Gaebe said a number of the changes are well underway, and the department will make the corrections "as quickly as we can" and provide regular progress reports to the board.
Treasurer Kelly Schmidt advised Gaebe to prioritize the changes based on which ones have the biggest impact.
"It's going to take a long time to do it well," she said.
Work has already begun to address one of the biggest errors found by auditors: the assigning of at least seven tracts of land to the wrong trust, which led to $2.8 million being credited to the Youth Correctional Center trust and $177,000 paid to the Mandan facility that should have gone to other trust beneficiaries.
Gaebe said a clerical error in 1943 assigned the tracts to the wrong trust. The department will work with the attorney general's office, budget office and Legislature to correct the distribution of dollars, and the database is being reviewed for possible similar errors, he said.
State lawmakers on the committee that ordered the audits questioned Gaebe at length last week about auditors' findings that some oil impact grants didn't meet eligibility requirements or were used for purposes that didn't meet legislative intent.
Gaebe said the department will modify its scoring methodology to make the grant consideration process more consistent but he doesn't plan to retroactively adjust any of the $364 million in grant awards made in fiscal years 2011-15. The program has been suspended this biennium because of slumping oil tax revenues.
"There was a lot of money and we were doing the best we could," he said.
"There's nothing that's been a mistake as far as I'm concerned," Dalrymple said. "But they make valid points about improving the process."
The land board's other members are Secretary of State Al Jaeger, Superintendent of Public Instruction Kirsten Baesler and Attorney General Wayne Stenehjem.