February 7, 2012
Secretary of State Auditors Find School Funding Error
State distributed too much of the Common Schools Fund to schools
SALEM – A state audit released on Tuesday found that the Department of State Lands distributed about $75.7 million of the principal of the Common School Fund, along with investment earnings in the 2001-2007 period. The Oregon Constitution only allows earnings on the principal to be distributed. The principal was about $830 million last June. The auditors recommend more detailed accounting of the funds.
“The State Land Board wants to ensure our decisions comply with the Constitutional restrictions on these funds, and the Department has changed its accounting methods to avoid these inadvertent reductions,” said Secretary of State Kate Brown. The Constitution creates the State Land Board, comprised of the Secretary of State, Governor, and Treasurer.
The Common School Fund was created at statehood with the purpose of generating income from state lands for school funding. Unclaimed property was included later by statute, with its earnings also designated for schools. The State Land Board distributed about $90 million to $100 million in each of the last three biennia for K-12 school funding.
“More detailed accounting would ensure that the restricted funds are clearly identified,” said Gary Blackmer, Audits Director. The Common School Fund principal can be restored in future years from investment earnings, he added.
The report, including the agency response, can be found at www.sos.state.or.us/audits.
For more information, please contact: