Petition Audit approved by State Auditor

A petition audit that was circulating last summer, targeting the New Rockford-Sheyenne School District, has officially been approved by the North Dakota Auditor's Office.

Petitioners were soliciting signatures as recently as last August, and the Communications Director for the Office of the State Auditor, Emily Dalzell, said the petition was officially approved on December 20, 2023.

The approval followed a months-long process of information gathering and verifying signatures listed on the petition.

Of 128 total signatures, Dalzell said 82 of them were verified and approved.

In order for an audit petition targeting a school district to be successful, the petitioners must acquire enough signatures to equal 35 percent of the number of voters at that district's most recent school board election.

With 225 ballots cast during last summer's board election at NR-S, the threshold for the audit petition was 79 signatures.

The next step for audit staff was to determine if the petitioners' financial concerns were sufficient to trigger an audit.

"... from October until December our office was sent information from the petitioners regarding the specifics of the concerns," said Dalzell. "Before the audit starts, there will be a phone call meeting with the chief petitioner and our office."

With the petition audit's approval now confirmed, Dalzell said staff from the auditor's office will audit the school's fiscal year (FY) 2024 financial records, beginning June 30, 2023 and ending July 1, 2024.

"We are expecting to begin the audit in early fall," said Dalzell. "The school district will first need to close their year-end books, and then our team can start the audit process."

Back when the petition was still circulating last summer, School Board President Todd Allmaras released a statement urging residents not to sign their name.

Allmaras stressed that any claims of missing funds were baseless and lacked any supporting evidence, and that the NR-S school district is already audited every year.

"Past audits indicated absolutely no justification for concern of impropriety or misappropriation," stated Allmaras.

Currently, N.D. Century Code dictates that school districts must be audited just once every two years. The NR-S school district, however, has itself audited annually.

The district's audits are typically conducted by a private firm contracted by the school and later approved by the Office of the State Auditor. Widmer Roel, a firm out of Fargo, N.D., is currently in the process of completing the school's FY 2022 and FY 2023 audits.

Due to the petition audit, the school's FY 2024 audit will be conducted by the Office of the State Auditor, rather than a private firm.

The school district will still have to pay for the audit themselves, however, and Dalzall did not indicate how much the audit might cost.

"There is no way of estimating the cost of what this will be as we have not started the audit yet," Dalzell explained. "The time a petition audit requires depends on many factors including record keeping and prompt client responses."

However, NR-S Business Manager Dave Skogen indicated the state's audit could have a significant impact on the school's budget, potentially costing the district around $30,000 – or roughly $10-15,000 more than what they might otherwise spend for an annual audit.

Meanwhile, at the school board's regular meeting on Monday, Jan. 9, the board addressed a number of policy issues ranging from purchasing and bidding requirements, to fraud prevention and audit policy.

Board members approved a first reading of Policy HEBD, which would officially place the district's tradition of undergoing an audit every year into school policy.

The school board's next regular meeting has been moved up to Monday, Feb. 5 at 7 p.m., due to the district tournament for girls basketball taking place in New Rockford the following Monday.